Reuters/Perth
Asian prices of liquefied natural gas (LNG) eased to under $18 per million British thermal units last week, as the peak winter season draws to an end.
Prices have come off despite news that Angola LNG, due to come online in the first quarter of this year, was delayed for a second time by technical problems.
“Things have cooled down a bit. People are now looking to the shoulder months where they don’t expect demand to be as strong,” one Singapore-based market source said, referring to the period between the peak winter and summer buying seasons when electricity consumption spikes.
LNG prices had been climbing rapidly with offers over the $20 per mmBtu level mid-February, but some market sources said major buyers such as the Japanese stayed out of the spot market due to the high prices.
“(Japanese utilities) tried to keep well out of the spot market ... the offers were so high,” the source said.
Despite shying away from the spot market, Japan’s imports for January did increase 1% over the year earlier period.
Japanese utilities, collectively the world’s largest LNG importers, often avoid the spot market during price spikes, instead negotiating for extra cargoes with long-term suppliers.
Although prices have dipped, there is still not much supply globally, especially with Angola LNG delayed.
“There aren’t that many cargoes floating around. There are no new volumes coming online,” another Singapore-based trade source said.
In Europe, British spot gas prices rose yesterday as supplies from Norway and Belgium fell and LNG terminals flowed less, amid forecasts of lower-than-average temperatures in mid-March.
US gas prices were slightly higher at around $3.49 per mmBtu. On Thursday, a government report showed a weekly inventory withdrawal above market expectations.
LNG prices had been climbing rapidly with offers over the $20 per mmBtu level mid-February, but some market sources said major buyers such as the Japa
