Model of LNG tanker is seen in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
SINGAPORE: Traders are cashing in on higher gas prices in Europe against Asia, diverting at least two liquefied natural gas (LNG) tankers that were initially eastbound towards Europe and Turkey in the past week, ship tracking data shows.
Falling temperatures in the northern hemisphere are boosting heating demand, lifting prices in both Asia and Europe and increasing regional competition for LNG supply.
Asian LNG futures based on the benchmark S&P Global Energy Platts Japan-Korea Marker (JKM) price was at US$11.22 per million British thermal units (mmBtu) last Thursday.
Meanwhile, the benchmark front-month contract at the Dutch Title Transfer Facility (TTF) hub closed at 38.22 per megawatt hour last Thursday, or US$13.17 per mmBtu, boosted in recent days by cold weather and low storage levels.
“Europe’s pull of LNG cargoes remains strong, given a recent cold snap, accelerating gas storage withdrawals,” said Ashley Sherman, senior analyst at Vortexa.
However, he added that north-east Asia’s colder weather below seasonal norms is expected over the rest of January, which should keep regional demand and competition for flexible cargoes firm.
The TTF is widely used as a price benchmark for LNG deliveries into Europe, while the JKM is the LNG benchmark price assessment for spot physical cargoes in Asia. — Reuters
