GLOBAL LNG-Asian prices rise to over two-year high driven by heating demand


Production issues in Australia and Malaysia, two of the top four largest exporters, and delays in the Panama Canal, through which U.S. ships part of its liquefied gas, are adding to tighter supply.(File pic shows Malaysian MISC's LNG tanker Camellia)

RIO DE JANEIRO/SINGAPORE: Asian spot prices for liquefied natural gas (LNG) rose this week to the highest since Sept. 2018 due to high demand for heating, a supply crunch and increasing freight rates, trade sources said.

The average LNG price for January delivery into northeast Asia was estimated at around $11.10 per million British thermal units (mmBtu), up $3.00 from the previous week, the sources said.

Prices for February delivery were estimated at around $10.50 per mmBtu.

Temperatures in Beijing, Tokyo and Seoul are expected to be lower than average over the next two weeks, weather data from Refinitiv Eikon showed, increasing gas demand for heating.

The rise in imports in China, as the economy recovers, and the lack of shipping availability is also helping to push prices up, the sources said.

"LNG imports by China hit a one-year high in November and are set to increase further, raising demand" a London-based trader said.

PetroChina and China National Offshore Oil Corp (CNOOC) said on Friday they will invite global bids for LNG in Shanghai.

A recent tender by Pakistan LNG to buy six spot cargoes for January only garnered interest for half of the requirements, showing how tight the supply situation is, sources said.

Production issues in Australia and Malaysia, two of the top four largest exporters, and delays in the Panama Canal, through which U.S. ships part of its liquefied gas, are adding to tighter supply.

Prices are expected to stabilize in the second half of January with record volumes coming from the U.S, where natural gas prices are below $3, making exports profitable, traders said.

LNG prices in Asia have increased by more than a five-fold since June, when lower demand due to the coronavirus pandemic drove them below $2.00/mmBtu.

- Reuters
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3

LNG , gas , Asian , prices , winter , Malaysia ,

   

Did you find this article insightful?

Yes
No

50% readers found this article insightful

Next In Business News

Fall in glove stocks offsets banks' rally
Norway's Seadrill writes down US$2.9bil on its oil rigs
TM ONE introduces new brand strategy and enhanced website
Petronas inks agreement with Sarawak Energy to purchase power supply
PPB Group plans to expand grains, agribusiness segment across the region
Bank Negara maintains OPR at 1.75%, growth to improve from 2Q
Khazanah posts RM2.9b profit, dividend of RM2b for govt
GSC purchases MBO Cinemas' assets to strengthen leadership position
Lotte Chemical declares 3.27c dividend for FY20
Tenaga expands Asean RE footprint with Vietnam foray

Stories You'll Enjoy


Vouchers