The price of liquefied natural gas collapses in Asia: too little demand
Mild weather and weak demand for natural gas in North Asia caused spot LNG prices in Asia to tumble 10.7% this week compared to last, for a third straight week of price declines, Reuters told Friday industry sources .
The average LNG price for February delivery in Northeast Asia stood at $25 per million British thermal units (MMBtu) this week. This is 10.7%, or $3/MMBtu, lower than last week, according to estimates from industry sources.
According to analysts, interest in spot LNG cargoes is weak despite the decline in prices in recent weeks. Inventories are at comfortable levels, while the mild start to the year in most of the northern hemisphere helps keep inventories higher than usual, dragging spot LNG prices lower.
If the downward trend in spot prices continues, some speculative buying by South Asian customers could begin, who may decide to take advantage of the low prices, Toby Copson, global head of trading at Trident LNG, told Reuters.
According to Copson, spot LNG prices in Asia could continue to fall in the coming weeks leading up to the Lunar New Year, which falls on January 22 this year. After the holiday period in China, demand could start to pick up as China gradually reopens, Copson told Reuters.
Natural gas prices also tumbled this week in Europe and the US on mild weather. Benchmark U.S. natural gas prices fell again on Thursday to their lowest level in nearly a year on warmer-than-normal weather.
In Europe, natural gas prices also collapsed due to a mild start to the year. The European benchmark price at the TTF hub fell on the first trading day of the year to its lowest level since February 21, 2022, days before the Russian invasion of Ukraine.
On Wednesday, the reference price of European gas fell below 70 euros/MWh (73 dollars/MWh) "due to the mild weather and the reduction in demand which led to a counter-seasonal increase in gas inventories", he said observed Ole Hansen, head of commodity strategy at Saxo Bank. “Furthermore, German electricity generation from wind has reached a record 47GW, or about 83% of total domestic consumption”.
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The article The price of liquefied natural gas collapses in Asia: too little demand comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-prezzo-del-gas-naturale-liquefatto-crolla-in-asia-troppo-poca-domanda/ on Fri, 06 Jan 2023 15:56:53 +0000.