Asian spot liquefied natural gas (LNG) prices rose for a second straight week as low prices attracted buying interest but gains were capped by supply flooding the market.
The average LNG price for April delivery into northeast Asia LNG-AS was estimated at about $3.40 per million British thermal units (mmBtu), up 20 cents from the previous week, traders said.
Prices for cargoes delivered in May were estimated to be at around $3.30/mmBtu.
While spot prices have gained slightly this week, they are still trading at their lowest for this time of year. They fell to a record low last month as the coronavirus outbreak dented industrial gas demand from China, the world’s second-largest LNG buyer.
While more businesses have reopened in China in recent weeks, analysts do not expect activity to return to normal levels until April.
PetroChina, the country’s top gas importer, suspended some natural gas imports, including on LNG shipments and piped gas, as a plunge in heating demand added to the impact on consumption from the coronavirus outbreak, sources said.
Lower growth in Asian LNG imports could mean a surge in LNG into Europe, which cannot absorb it due to high gas storage levels and reduced scope for coal-to-gas switching, the Oxford Institute for Energy Studies said.
“The forward curves for prices suggest that there might be some shut-ins of LNG, although this may not necessarily be from the U.S.,” it added.