Asian LNG prices tumble as supply floods market

Traders say LNG cargoes may struggle to find a home. (AFP)
Updated 23 November 2019

Asian LNG prices tumble as supply floods market

  • Singapore’s Pavilion Energy has taken the unusual step of canceling the loading of a cargo from the US

SINGAPORE: Asian spot prices for liquefied natural gas (LNG) fell this week as a supply glut continued to weigh, while demand growth was muted by signs of a mild winter in Northeast Asia.

Prices for January delivery to Northeast Asia are estimated to be about $5.70 per million British thermal units (mmBtu), down 20 cents from last week for the same period, said several sources who are market participants.

With European gas storage nearly full, cargoes may struggle to find a home, traders said.

Singapore’s Pavilion Energy has taken the unusual step of canceling the loading of a cargo from the US, but has agreed to pay for it, several industry sources said.

A company spokeswoman said Pavilion evaluated scheduling and other commercial matters and took the decision not to lift the cargo in coordination with the supplier.

Supply was ample with several LNG plants offering cargoes this week.

Angola’s LNG project offered a cargo for delivery in January to as far as Indonesia, while Australia’s Ichthys and Papua New Guinea LNG plants offered a cargo each for December, sources said.

Indonesia’s Tangguh LNG plant, which is operated by oil major BP, also offered five cargoes for delivery over the first quarter of next year, sources added.

Some buy tenders from Thailand were finalized with PTT’s Singapore trading unit awarding a tender to buy more than 10 LNG cargoes for delivery over a year from March, 2020, a company official said.

State-run Electricity Generating Authority of Thailand (EGAT) has awarded its first spot tender to import LNG cargoes for delivery in December this year and in March next year, industry sources said.

It is also seeking government approval to import one more spot LNG cargo for next year, one of the sources said.

South Korea’s SK Energy and POSCO were jointly seeking a cargo for delivery in the second half of December, industry sources said, although further details of the tender were not immediately available.

Low spot prices also attracted some demand from India, with Indian Oil Corp. seeking a cargo for delivery on Dec. 17, industry sources said.

“The low prices may be creating some end-user demand in India which is attracting purchase interest in the international market,” a source familiar with the Indian market said.


Oil steady as virus fears counter positive factory data

Updated 04 August 2020

Oil steady as virus fears counter positive factory data

  • Fears over rising COVID-19 cases weigh on market; euro zone manufacturing activity expands modestly

LONDON: Oil prices steadied on Monday as rising COVID-19 cases around the globe and oversupply worries fueled by the prospect of OPEC and its allies winding back output cuts were offset by positive industry data in Europe and Asia.

Brent crude rose 5 cents, or 0.1 percent, to $43.57 a barrel by while US West Texas Intermediate crude gained 6 cents, or 0.1 percent, to $40.33.

Over the past month, Brent has been trading in a range between $41 and almost $45.

“Oil continues to trade in an incredibly rangebound manner,” said Warren Patterson, ING’s head of commodities strategy.

“Speculators appear to be getting more nervous about the demand recovery, with the path much more gradual than market expectations coming into the second half of the year.”

Coronavirus cases have continued to climb in the United States and have reached almost 18 million globally, with more countries imposing new restrictions or extending existing curbs in an effort to control the pandemic. While fuel demand recovers slowly in the face of the resurgence of the virus, investors are also worried about oversupply as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, prepare to ease oil supply cuts from August.

“Concerns appear to be developing that a rise in OPEC+ production will coincide with uneven recovery in oil demand due to localized setbacks following secondary waves of COVID outbreaks,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.

OPEC+ members have been cutting output since May by 9.7 million barrels per day (bpd). From this month cuts will officially taper to 7.7 million bpd until December.

Russian oil and gas condensate output increased to 9.8 million bpd over Aug. 1-2, from 9.37 million bpd in July, a source familiar with data said on Monday.

Oil prices fell earlier in the session but found some support after a survey showed manufacturing activity across the eurozone expanded last month for the first time since early 2019. 

Positive manufacturing data in Asia also helped to support oil prices.

A Reuters poll on Friday indicated that oil is set for a slow crawl upwards this year as the gradual easing of coronavirus-led restrictions buoys demand, though a second COVID-19 wave could slow the pace of a recovery.