Get 40% Off
🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Global LNG-Prices extend losses as supply builds up

Published 12/09/2015, 12:44 am
Updated 12/09/2015, 12:47 am
Global LNG-Prices extend losses as supply builds up
ENI
-
NG
-
LNG
-

* Japan power companies Aug LNG use falls 2.6 pct on year

* PNG launches two single cargoes tenders

By Sarah McFarlane

LONDON, Sept 11 (Reuters) - Asian liquefied natural gas (LNG) prices slipped this week as more supply came onto the market from producers including Papua New Guinea and Indonesia, while end users in the region already looked well stocked.

The price of Asian spot cargoes for October delivery fell to about $7.20 per million British thermal units (mmBtu) on Friday, from about $7.50 per mmBtu last week.

"I don't think there's structural demand. Everybody's been noting that Japan, Korea and China are not showing a lot of demand and I think there are sporadic requirements in Thailand and Malaysia," said a trader.

Japanese power companies consumed 4.72 million tonnes of LNG in August, a fall of 2.6 percent from a year earlier, while their coal consumption rose 1.9 percent to 5.82 million tonnes, data from the Federation of Electric Power Companies of Japan showed. ID:nENNF9A0SI

Papua New Guinea has launched two tenders to sell single cargoes of LNG in the space of a week, while Indonesia's Bontang also launched a sell tender in what continued to be an oversupplied market. ID:nL5N11H2PF

The overhang of LNG supply could grow heavier yet as Iran hopes to bring its gas to the European Union by shipping LNG to Spain, Iran's oil minister was quoted as saying at a news conference with his Spanish counterpart. ID:nL5N11D2F8

Hedge fund shortseller Jim Chanos said on Wednesday he is betting against LNG company Cheniere Energy Inc LNG.A and that his fund had been negative on LNG for the past six months. ID:nL1N11F0QL

One of the brighter spots in the market has been new demand from the Middle East and North Africa, with both Egypt and Jordan having large outstanding tenders, due to be awarded at the end of the month.

"Strong demand from the Middle East on the back of tenders means we're not seeing Europe being flooded with LNG yet," a second trader said.

Last month, however, Italian energy group Eni ENI.MI said it had discovered potentially one of the world's largest natural-gas fields off the Egyptian coast, predicting the find could help meet Egypt's gas needs for decades. ID:nL5N1150CI

"There are some views that that can be commercialised and plugged into Egypt's gas system quickly and easily. In terms of its location a lot of the infrastructure is already in place because of the liquefaction plants on the Mediterranean coast of Egypt," said a trader.

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.