LNG Bunker Snapshot: Prices come down due to lower demand

Rotterdam’s LNG bunker price has dropped in the past week amid elevated gas storage levels and steady Norwegian supplies, while Singapore's price has been weighed down by weak Asian demand.

PHOTO: LNG tanker ship. Getty Image

Changes in weekly LNG bunker prices:

• Rotterdam down by $16/mt to $664/mt
• Singapore down by $8/mt to $779/mt

Rotterdam

Rotterdam’s LNG bunker price has declined by $16/mt in the past week. The port's benchmark has tracked the downward movement in the front-month NYMEX Dutch TTF Natural Gas contract.

The price drop can be attributed to elevated inventories in the European gas market and steady supplies from Norway.

European gas stocks have increased in the past week and are now at 77.4% capacity. The current stock levels are similar to last year and are above the five-year average of 67.3%.

Despite the ample supply, there is a potential for increased gas consumption in the near term, driven by forecasts of hotter weather, particularly in the southeast region of Europe. The anticipated rise in power needs could support gas consumption, offering a counterbalance to the current price decline, according to the head of commodities strategy at ING, Warren Patterson.

Singapore

Singapore’s LNG bunker price has come down by $8/mt in the past week, driven by a lower NYMEX Japan/Korea Marker (JKM) price.

Weak demand in the Asian LNG market has also contributed to the price drop, according to Rystad Energy.

For instance, Japan’s power sector has been facing unexpected outages, which are expected to last throughout July, impacting overall demand. Demand from China is also muted.

Additionally, South Korea's new nuclear power plant, which started operating at the end of June, has reduced the need for gas, Rystad Energy said.

However, forecasts of higher temperatures in China, Japan, and South Korea in the first half of July could lift demand for gas to produce electricity. This could support LNG prices.  

By Debarati Bhattacharjee

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