Asian spot prices hit new lows as oversupply weighs

By Ekaterina Kravtsova LONDON (Reuters) - Asian spot prices for liquefied natural gas (LNG) dropped to new lows this week as sporadic spot demand failed to change the overall trend of oversupply in the market. Spot prices for April delivery to northeast Asia are estimated at around $6.20 per million British thermal units (mmBtu), down 10 cents from the previous week. BP sold a cargo to Gunvor at this price on Thursday for mid-April delivery to Asia in the Platts open window.

Reuters February 23, 2019 00:05:46 IST
Asian spot prices hit new lows as oversupply weighs

Asian spot prices hit new lows as oversupply weighs

By Ekaterina Kravtsova

LONDON (Reuters) - Asian spot prices for liquefied natural gas (LNG) dropped to new lows this week as sporadic spot demand failed to change the overall trend of oversupply in the market.

Spot prices for April delivery to northeast Asia are estimated at around $6.20 per million British thermal units (mmBtu), down 10 cents from the previous week.

BP sold a cargo to Gunvor at this price on Thursday for mid-April delivery to Asia in the Platts open window. Japanese utility Tohoku Electric bought a cargo in the market for April delivery at a similar price, a trade source said.

There were several enquiries for deliveries to China between late April and early May after traders returned from the Lunar New Year holidays, but overall LNG demand across north Asia remained exceptionally weak, sources in Singapore said.

The current price is at the lowest level since September 2017, but it is unlikely to have reached its bottom yet.

"I think (when the price falls to) between $5-6/mmBtu, we should start to see some demand creation in Asia," a trader in Europe said, adding that it would start rebalancing the flow of cargoes between the Atlantic and Pacific basins.

There were some offers in Europe from sellers looking to divert their cargoes from Asia to Europe, another trader said.

South Korea's KOGAS is also diverting cargoes from its U.S. offtake to Europe this winter, with the latest cargo to reach Britain's Isle of Grain terminal on Feb. 28.

Gas prices in Europe fell this week too, contributing to the weakness in the global LNG market. A stronger oil market may support gas prices somewhat but weak demand and ample supply are expected to keep them generally low.

Cargoes in Europe traded this week at around 95 percent to Britain's gas price benchmark for delivery into Britain, around 96-97 percent to the Dutch gas benchmark for delivery to the Netherlands, a 30 cent discount to the Dutch price for delivery to Spain and a 20 cent discount to the Dutch price for delivery to Italy, a trader said.

A number of outages that have taken place so far this year contributed to at least 15 missed cargoes, but oversupply is much higher than that.

Train 2 at Nigeria's Bonny plant was off this week, after going offline last week, sources in Europe said. Train 1 which was also offline last week is back online, they added.

In the United States, production recovered after an outage last week at one of the trains at Sabine Pass, a U.S. trade source said.

"The train didn't fall to zero, as evidenced by still a lot of gas trading out there," the source said, adding that current production levels were around 5.2 billion cubic feet per day.

U.S. producer Cheniere, which operates Sabine Pass, declined to comment.

Cheniere, however, could make a transhipment of a Yamal LNG cargo in Europe, which would signify that the company may need to substitute volumes lost in maintenance and loading halts in the United States earlier this month.

The Cool Explorer which is empty and is heading to the Gate terminal in the Netherlands is chartered by Cheniere, shipping sources said.

New supply options this week came from Russia's Sakhalin 2 plant and Angola LNG. India's Gail offered a new swap of its U.S. offtake.

On the demand side, Argentina's Integracion Energetica Argentina (IEASA), Kuwait Petroleum Corp (KPC) and Mexico's CFE issued buy tenders.

(Reporting by Ekaterina Kravtsova, additional reporting by Sabina Zawadzki in LONDON, Henning Gloystein in SINGAPORE, Collin Eaton and Gary McWilliams in HOUSTON, editing by David Evans)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Oil rises 2% as OPEC complies with production cuts
Business

Oil rises 2% as OPEC complies with production cuts

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000
Business

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000

By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen
World

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen

By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son