Asian spot liquefied natural gas (LNG) prices spiked to a fresh eight-year seasonal high this week, as demand remained robust globally for power generation needs in summer.
The average LNG price for August delivery into Northeast Asia was estimated at about $14 per metric million British thermal units (mmBtu), up $1.50 from the previous week, trade sources said.
This is the highest that spot prices have climbed for this time of the year since 2013, Reuters data showed.
Global prices for natural gas are at multi-year highs, with high temperatures driving up demand for power generation in the northern hemisphere for air conditioning and as traders in some regions replenish stocks ahead of winter. read more
Demand from Latin America was also firm as drought affected Brazil’s hydropower, boosting its LNG imports, trade sources said. Argentine energy company Integracion Energetica Argentina(IEASA) is also seeking four cargoes for delivery in August and September, they added.
Buyers in Bangladesh and Pakistan have paid above $13 per mmBtu for cargoes to be delivered in July to meet summer air-conditioning demand, the sources said.
Bangladesh is expected to further procure one spot cargo a month from August to November, a senior official from state-run Petrobangla told Reuters.
“Global LNG prices are going up but it is nowhere that abnormal level what we have seen early this year,” he added.
Gail India is seeking a cargo for delivery in July into Dahej in a tender that closes on Friday, while India’s Petronet likely did not award a tender seeking cargoes for delivery in the third quarter, industry sources said.
Russia’s Sakhalin Energy likely awarded a cargo for August loading at about $13.70 to $13.95 per mmBtu on a delivered basis, one of them said.
In a knock-on effect of high spot Asian LNG prices, benchmark European gas prices soared this week with the British and Dutch front-month contracts both hitting record highs on Thursday.