Growing LNG Supply Pushes Prices Sharply Lower

Growing LNG Supply Pushes Prices Sharply Lower

Asian spot liquefied natural gas (LNG) prices dropped this week as scarce demand, rising supplies and continuing weak crude oil markets put off hopes of a winter rally, Reuters reported.

Prices slipped around 80 cents to $13.60 per million British thermal units (mmBtu) for December delivery, compared with last week, as a limited pool of buyers encountered rising supply.
Weak crude oil prices around $85 a barrel threaten to drain liquidity from spot LNG markets in January, when buyers arrange annual delivery programs (ADPs) on long-term, oil-linked supply contracts. Some ADPs with Qatar, the world’s biggest LNG producer, are negotiated in January, traders said. In Europe, buyers can exercise the rights under their long-term deals from January.
Falling prices were partly explained by the absence of demand from Korea Gas Corp., the world’s biggest LNG buyer, as it struggled to absorb supplies arriving under long-term contracts. Kogas, as it is known, deferred deliveries of 40 summer cargoes until the winter.
A decline in spot prices across the peak demand winter period is also leading traders to close out some high-risk trading positions. Energy companies and traders stashed several cargoes onto tankers floating in the ocean from August, when prices were extremely low, in a bid to profit from an expected winter rally.
“Weak Asian demand, however, has kept spot prices at the start of the winter in check.

Short URL : http://goo.gl/VLR0yd

You can also read ...

Russia, Turkey Sign Pipeline Agreement
Russian state gas giant Gazprom said on Saturday it had signed...
The steady gas supply to neighboring states has caused international markets to trust Iran.
Natural gas exports experienced a 60% hike during the fiscal...
Shell is a strategic partner of Petrobras in the pre-salt layer.
Shell was the only company expressing interest in purchasing...
Four solar plants, with a total capacity of 33.5 MW, have come on stream in Yazd Province.
The central Yazd Province’s solar power production capacity...
Novak: Oil Output Could Rise to October 2016 Level
A return to oil production levels that were in place in...
SOCAR to Expand Gas Storage Capacity
There are plans to expand underground gas storage facilities...
Currently, 80,000 barrels per day of crude are extracted from North Azadegan Oilfield.
The tender results for developing North Azadegan Oilfield in...
Annual Potable Water Consumption at 7.5 bcm
Potable water consumption amounts to a massive 7.5 billion...