🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

GLOBAL LNG-Oversupplied Japanese players to sell off excess volumes

Published 28/01/2017, 05:04 am
© Reuters.  GLOBAL LNG-Oversupplied Japanese players to sell off excess volumes
XOM
-
9503
-
9532
-

By Oleg Vukmanovic

MILAN, Jan 27 (Reuters) - Asian spot LNG prices extended losses this week as oversupplied Japanese utilities sought to offload cargoes and as key European gas benchmarks softened.

Asian prices for LNG delivery in March fell 25 cents to about $7.75 per million British thermal units (mmBtu), traders said, ranging from $8/mmBtu to about $7.60/mmBtu.

Prices tailed off even more sharply into April, currently trading at around the $7/mmBtu mark, they said.

One trader said utilities in Japan "have overbought due to warmer than average temperatures at the end of 2016 and the current cold spell doesn't look like it will last," leaving them stuck with larger inventories.

"This will put massive pressure on the market as I don't think the demand is there for March," to absorb the excess supply, the trader said.

Kansai Electric 9503.T , Osaka Gas 9532.T and LNG importing giant JERA are expected to unload at least one cargo apiece for March delivery, he said, though it was unclear if Kansai was trying to arrange a time-swap as opposed to a straightforward sale.

A second trader said JERA was already marketing two shipments from Indonesia's Donggi-Senoro LNG export facility and that it has likely sold one of those cargoes.

Further weighing on Asia's March LNG contract was an 8 percent slide in Europe's equivalent benchmark, at Britain's National Balancing Point trading hub, which settled at $6.40 per mmBtu on Friday.

China's Sinopec put up for tender several cargoes for February and March delivery from Australia's AP LNG project, where it is a stakeholder with long-term supply rights.

Exxon (NYSE:XOM) Mobil's Papua New Guinea (PNG) export plant sold off one cargo for March and one for April loading, via a tender process, at a price above $8/mmBtu, traders said.

"I think PNG went above 8 - but - they are big and rich and several people still have a lot of in-the-money contracts in the Far East where you would pay a big premium to take in a cargo of that quality," one said.

Thailand's PTT was seeking a March shipment via tender. Angola, which has launched a fresh sale tender, this week sold a cargo to Spain's Union Fenosa at a price-tag above $9/mmBtu. The status of Gail India's buy tender, which closed on Jan. 24, could not be immediately verified.

Attracted by an upsurge in gas prices in France and Spain, U.S. exporters are shifting their focus away from Asia as problems with Algerian gas supply have driven southern Europe's gas prices higher. Skikda LNG facility will fully resume at the end of the month after a maintenance, but state energy firm Sonatrach has fulfilled its gas delivery commitments, the Sonatrach CEO said on Thursday. state-run energy firm Enarsa has launched a tender, which closes on Feb. 7, seeking 16 LNG cargoes for delivery between April and August.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.