Asian spot LNG holds near four-year high as European storage worries persist
UNG•Asian spot LNG prices edged down to $31.30 per mmBtu for December delivery, from $31.40 a week earlier, and remained near a four-year high. Low European storage and uncertainty over US-Iran diplomacy kept the market tight.
1. Prices remain elevated
The average price for December delivery into northeast Asia was estimated at $31.30 per million British thermal units in the week to November 13. January delivery was assessed at $31.10 per mmBtu.
2. Storage supports demand
European benchmark gas prices at the Dutch TTF hub were around €92 per megawatt hour on Friday, up from about €86 a week earlier. Storage was 71.6% full on November 10, almost 18 percentage points below the five-year average; inventories could fall to around 21.5% by the end of March at the current withdrawal pace.
3. Cargoes favour Europe
LNG shipments through the Strait of Hormuz improved to 16 so far in November, compared with 26 in all of October, while attacks or mine damage to tankers continued. US and Nigerian prompt arbitrage to northeast Asia via the Cape of Good Hope favoured Europe, and Atlantic and Pacific freight rates fell to $31,000 and $54,500 a day, respectively.
