An offhand LNG supply demand growth in Asia, notably from the US, supports the view that European gas hubs will balance the global LNG market for the rest of the year, reports S&P Global Platts.
This scenario is reflected in the current forward curve indicating that reloads to Asia remain less profitable than sales at the European gas hubs.
LNG shipping rates are expected to increase further in the next months on the back of higher mile tonnage, leading to tight ship availability, and limiting further incentives for longer trips toward Asia.
Other key factors to watch for are:
- any price-sensitive supply turndowns in LNG;
- commercial turndowns in Norwegian and Russian pipeline gas supplies to Europe; and
- an increase in demand in Asia in Q4 in the power or residential sectors.
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Source: S&P Global Platts
