Prices of Asian spot liquefied natural gas (LNG) edged up this week as supply for cargoes to be delivered in April tightened, but traders expected prices to remain low for a while as demand continued to be weak amid the coronavirus outbreak.
The average LNG price for April delivery into northeast Asia is estimated at about $3.20 per million British thermal units (MMBtu), 20 cents higher from the previous week, but still, near-record low prices, several traders said.
Prices for cargoes delivered in May are estimated to be at the same level as April, they added.
“Supply for April has more or less dried up as U.S. cargoes are unable to make it to Asia,” a Singapore-based trader said. Low spot prices were also attracting buying interest from South Korean and Indian firms, traders added.
Still, market sentiment was bearish after PetroChina declared force majeure on natural gas imports including on piped gas and LNG, sources said this week. PetroChina meets 40% of its total gas needs through imports and about 70% of imports are through piped gas from central Asia, Myanmar and Russia, while the rest are through LNG, one of the sources said.
“The supply cuts will fall on suppliers proportionately but LNG suppliers will have a lesser impact versus those on piped gas,” said one of the sources with direct knowledge of the situation.
It was not immediately clear what volumes PetroChina had declared force majeure on or the time period the notice covers.