The spot price of liquefied natural gas in Asia dropped for the fourth consecutive week, driven by weaker demand and contained geopolitical risk as the ceasefire between the United States and Iran holds, despite some spot purchases by South Asian buyers. The average LNG price for June delivery in Northeast Asia LNG-AS was estimated at $16.05 per million British thermal units (mmBtu), down from $17/mmBtu last week. President Donald Trump expressed confidence that an agreement to end the war in Iran could be reached soon, stating that the next meeting between the two countries could take place over the weekend in Pakistan. He added that if an extension of the ceasefire was possible, it may not be necessary as Tehran was seeking an agreement.
While ongoing discussions have calmed prices, analysts believe that the resumption of LNG supply in the Middle East may take longer than anticipated.
Current price movements do not fully reflect market fundamentals and are rather influenced by political developments or tweets regarding ceasefire talks and potential peace, said Siamak Adibi of consulting firm FGE.
Although demand has been insufficient to offset overall price weakness, buyers from India and Bangladesh have moved to secure volumes quickly after previous tenders were not awarded, said Aly Blakeway, director of Atlantic LNG at S&P Global Energy.
In Europe, S&P Global Energy assessed its daily Northwest Europe LNG Marker (NWM) reference price for June deliveries on a delivered ex-ship (DES) basis at $14.238/mmBtu on April 16, a $0.40/mmBtu discount compared to the TTF hub price.
Argus evaluated it at $14.30/mmBtu, while Spark Commodities assessed the May price at $14.194/mmBtu.
European buyers are increasingly relying on pipelines to balance short positions, optimizing regasification capacity and hourly slots rather than engaging in aggressive competition for LNG cargoes, said Mr. Blakeway from S&P.
Meanwhile, investment funds have significantly reduced their exposure to TTF gas term contracts over the past fifteen days, struggling to reconcile record net long positions accumulated by speculative capital in March with the weakness of TTF prices, said Seb Kennedy, an independent analyst at Energy Flux News.
Regarding LNG freight, Atlantic rates have increased by 13% to reach $101,750/day, while Pacific rates decreased by nearly 2% during the week to $71,750/day, according to Qasim Afghan, an analyst at Spark Commodities.
The American arbitration of the first-month route to Northeast Asia via the Cape of Good Hope continues to point towards Asia, encouraging cross-border flows and reducing ship availability, significantly contributing to the recent increase in freight rates in the Atlantic.
