LNG bunker prices in Rotterdam and Singapore have shown contrasting trends due to different market dynamics. While Rotterdam’s prices slightly declined amidst ample European gas storage, Singapore saw a significant surge, driven by rising gas demand and shifts in the underlying gas benchmark. This report provides an overview of the factors influencing these price changes, as sourced from Engine.
Rotterdam’s Price Decline
In Rotterdam, LNG bunker prices dipped by $4/mt to $766/mt. Despite ongoing geopolitical tensions between Ukraine and Russia, ample gas storage in Europe, currently at 87.6% capacity, has provided a buffer against supply disruptions. This has kept the prices relatively stable, even amidst potential supply concerns.
Singapore’s Price Surge
Conversely, Singapore experienced a sharp increase in LNG bunker prices, up by $102/mt to $885/mt. This was largely driven by the rollover of the NYMEX Japan/Korea Marker (JKM) contract to a higher-priced month, coupled with increased demand for gas-fired power due to above-average temperatures in East and Southeast Asia. The surge in electricity demand, particularly in South Korea and Japan, has further strained LNG supplies, pushing prices higher.
Impact of Weather and Energy Supply Challenges
The upward pressure on LNG prices in Singapore is also exacerbated by reduced nuclear power availability in South Korea, where unplanned maintenance has left only 18 out of 21 reactors operational. As a result, the country has increased its reliance on LNG to meet its electricity needs, further driving up prices in the region.
These regional differences in LNG bunker pricing highlight the complex interplay of storage levels, energy demand, and geopolitical factors in shaping global fuel markets.
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Source: ENGINE
