Asian LNG prices rise to nearly $26 per million Btu — OilPrice
Spot prices for liquefied natural gas (LNG) for Asian buyers have risen to nearly $26 per million British thermal units. By the end of Wednesday, LNG in Asia was trading at $25.908 per mmBtu, up 5% over the week, OilPrice reports, citing Bloomberg and unnamed traders.
Situation in the Strait of Hormuz
The price increase came after strikes between the United States and Iran resumed. U.S. President Donald Trump said that the United States had destroyed new equipment that, according to him, Iran had been trying to build along the Strait of Hormuz. He called the attack very large-scale and said the United States was ready to repeat it.
At the end of the previous week, gas prices also rose in Asia and Europe after Qatar's state-owned company QatarEnergy extended force majeure on LNG supplies, which will also remain in effect in November. The source links this to the continued restrictions on transit through the Strait of Hormuz.
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Buyers seek spot cargoes
Demand for spot supplies was supported by buyers from South Asia, including Pakistan and Bangladesh. They are seeking alternative volumes to replace contracted supplies from Qatar that cannot leave the Persian Gulf. According to tender documentation seen by Bloomberg, utility companies in South Korea, India, Taiwan and Bangladesh are seeking LNG cargoes for delivery in October and November.
Pakistan earlier this week rejected an LNG offer in its latest tender. A cargo from BP was offered at a price above $27 per mmBtu, which the country's state gas trading company considered too high.
Prices in Europe
OilPrice notes that normalization of LNG flows from the Persian Gulf is not yet in sight. Against the backdrop of seasonal growth in gas demand, this could increase price pressure and limit the ability of some buyers to purchase fuel. Gas is also becoming more expensive in Europe, complicating procurement ahead of the winter season.
