SINGAPORE: Asian spot liquefied natural gas (LNG) prices fell to a fresh 20-month low this week, pressured by subdued regional demand and plentiful supply, market sources said.
The average LNG price for February delivery into Northeast Asia slipped to $9.50 per million British thermal units (mmBtu), down from $10/mmBtu last week, marking its lowest level since April 2024.
Analysts attributed the decline to weak gas demand in key Asian markets. “Continued softness in Northeast Asian demand, firm Chinese pipeline gas supplies and strong renewable power generation in Japan have weighed on LNG consumption,” said Nelson Xiong, analyst at Kpler. He added that warmer-than-seasonal temperatures and ample Pacific supply are likely to keep the Japan-Korea Marker (JKM) price under pressure.
Lower prices prompted limited buying from price-sensitive importers last week, though demand from China remains muted, with buyers targeting prices in the mid-$8/mmBtu range, according to Argus.
In Europe, S&P Global Energy assessed its Northwest Europe LNG Marker for February deliveries at $8.881/mmBtu, a discount of $0.54/mmBtu to the TTF gas hub. Argus and Spark Commodities placed prices near $9/mmBtu.
Despite adequate supply from pipeline gas and strong inflows of U.S. LNG, market sentiment remains cautious amid forecasts of colder weather early in the new year. Analysts note that Europe’s relatively lower gas storage levels could prompt increased LNG purchases in January and February.
LNG shipping rates also eased, with Atlantic rates falling to $92,000 per day and Pacific rates to $75,750 per day, reflecting softer market conditions.
By Reuters
