Rising spot prices in Asia due to demand for air conditioning

A liquefied natural gas (LNG) tanker is pulled towards a thermal power plant in Futtsu, east of Tokyo, Japan on November 13, 2017. REUTERS / Issei Kato

June 25 (Reuters) – Spot prices for liquefied natural gas (LNG) in Asia rose this week on strong demand for power generation fuel as a hotter-than-usual summer in different parts of the world. world has boosted the consumption of electricity for air conditioning.

The average LNG price for August delivery in North East Asia was estimated at around $ 12.50 per million UK thermal units (mmBtu), up $ 0.80 from the previous week, industry sources said. Read more

Temperatures in Beijing, Tokyo, Seoul and Shanghai are expected to be above average over the next two weeks, Refinitiv Eikon weather data has shown, which could reduce inventories and increase demand for gas for cooling.

In the United States, forecasts of warmer temperatures over the next two weeks also helped push natural gas futures to a 29-month high, at a time of smaller-than-expected storage and exports. rising.

Gas storage in Europe is below the average for the past five years, increasing the demand for replenishment.

“You use air conditioning more and low stocks drive up prices,” said a London-based trader.

The supply side disruptions also kept the market tight. Russian producer Sakhalin Energy said it plans to shut down production for about a month from July to perform maintenance.

Competition between Asian and European buyers for cargoes has increased. Taiwan surprised the market by seeking a purchase of 10 cargoes for delivery between August and December, and offers through June 28.

BP offered $ 0.10 more than the benchmark Platts LNG known as KJM for a shipment to be delivered in August to PipeChina Tianjin, China.

Petronas sold a shipment of PFLNG Dua for delivery in August for around $ 12.

A group behind a project for an LNG import terminal at Brunsbuettel on the German North Sea said it would apply to the authorities for a building permit by the end of June, a milestone for the project.

Reporting by Sabrina Valle; edited by David Evans

Our standards: Thomson Reuters Trust Principles.

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