LONDON: Asian spot liquefied natural gas prices rose this week on stronger demand amid high temperatures in north and south China, pushing European buyers to bid at relatively narrow discounts to attract sellers.
The average LNG price for June delivery into north-east Asia rose to $10.50 per million British thermal units (mmBtu), from $10.40/mmBtu in the previous week, industry sources estimated.
“We have seen Asian and European prices rise higher, mostly following news of the Gorgon LNG outage,” said Ryhana Rasidi, LNG analyst at data analytics firm Kpler.
“However, we estimate the impact of the outage to be limited in the short term and downward pressure is expected on prices due to the low-demand shoulder season in Europe and Northeast Asia, where gas/LNG stocks remain sufficient for now,” she said.
Chevron Australia said last week it was working to resume full production at its Gorgon gas facility after a mechanical fault caused one LNG production train to go offline. Analysts expect the affected production train to be offline for up to five weeks.
Moreover, geopolitical developments and supply-side factors are contributing to the price rally in the Asian spot LNG market. Recent geopolitical tensions and disruptions in traditional LNG supply chains have underscored the importance of diversification and resilience in energy sourcing.
In response, Asian buyers are actively seeking to secure additional LNG volumes through spot purchases, further driving up prices. Additionally, supply constraints in key LNG-producing regions have constrained the availability of cargoes, exacerbating the supply-demand imbalance and fueling price appreciation.
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