LONDON: Asian spot liquefied natural gas (LNG) prices eased this week amid subdued demand, ample storage, and growing anticipation of a meeting between US President Donald Trump and Russian President Vladimir Putin later today, which traders say could reshape energy market dynamics.
September delivery into northeast Asia averaged $11.65 per million British thermal units (mmBtu), down from $11.90/mmBtu last week, while October delivery was estimated at $11.45/mmBtu, industry sources said.
“This meeting may not only be decisive for Ukraine but also for the fate of Russian sanctions and future LNG flows. Russia could use the talks to open discussion on Arctic LNG 2—its clearest link to global LNG markets,” said Klaas Dozeman, analyst at Brainchild Commodity Intelligence.
The 19.8 mtpa Arctic LNG 2 project, under US sanctions, has two of its three trains installed and could rapidly boost supply if restrictions ease. Conversely, Russia’s Yamal and Sakhalin LNG plants (combined 30 mtpa) may face heightened risks if sanctions tighten, warned Martin Senior, head of LNG pricing at Argus.
Arturo Regalado of Kpler noted that geopolitics remain the “wild card.” A lack of progress could trigger stricter sanctions or secondary US tariffs on buyers of Russian energy.
Weather-driven demand in Asia has been limited, with long-term oil-indexed LNG contracts proving more attractive than spot purchases. Still, some Chinese demand has surfaced, with Beijing Gas buying two cargoes below $12/mmBtu, a level it considers affordable.
Analysts expect further price softness next week as high Chinese inventories and steady Pacific supply weigh on spot demand.
In Europe, gas prices at the Dutch TTF hub traded in a narrow band on Friday as a continent-wide heatwave eased. S&P Global Commodity Insights pegged its North West Europe LNG Marker for September at $10.582/mmBtu, slightly below TTF futures, while Argus and Spark Commodities assessed it at $10.540/mmBtu and $10.534/mmBtu, respectively.
Freight rates held steady, with Atlantic routes at $36,000/day and Pacific at $33,250/day, according to Spark’s Qasim Afghan.
By Reuters
