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Asian LNG spot prices at three-year low

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LNG Asian spot prices fell to a more than three-year low last week, dragged down by cargoes trading at near record low prices, trade sources told Reuters.

 

Spot prices for September delivery to Northeast Asia LNG-AS are estimated to be about $4.10 per mill British thermal units (mmBtu), down 15 cents from the week before, the sources added.

This is the lowest price seen since April, 2016, Reuters’ data showed.

Ample supply of LNG and remaining weak demand for the fuel has seen at least two spot trades concluded at below $4 per mmBtu for August and September cargoes.

 

Indian Oil Corp bought a cargo for delivery in the second half of August from commodity trader Trafigura at $3.69 per mmBtu through a tender, industry sources said, while China National Offshore Oil Corp (CNOOC) bought a cargo for delivery in early September from Vitol at $3.90 per mmBtu.

The last time a cargo traded below $4 was likely about three to four years ago, two sources said.

IOC also bought a cargo for September delivery at $4.20 per mmBtu from Vitol, while PetroChina bought a cargo for September delivery from Vitol at $4.05 per mmBtu, during the S&P Global Platts trading period on Wednesday, the sources added.

European spot LNG prices have been trading at a discount to the benchmark Dutch month-ahead gas price at levels below $3.40 per mmBtu last week.

However, traders appear to be taking advantage of the low spot prices by starting to make enquiries to book vessels to store or ship LNG, as they hedge on winter demand to boost prices.

At least one Japanese trader has inquired for a vessel to operate for 60 days to charter an Australian cargo loading in September, said a shipbroker, talking with Reuters.

Australia’s Ichthys LNG plant has offered two cargoes for loading in early September, traders said.

On the demand side, Turkish state energy company state energy company Botas is looking to buy three cargoes for delivery in August, September and October, while India’s Gujarat State Petroleum Corp (GSPC) sought cargo for delivery in early September, they said.

Guangzhou Gas is also seeking a cargo for late August delivery into Dapeng via a tender, traders said.

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