LNG Bunker Snapshot: LNG Prices Attractive As Gas Decouples From Oil

92

  • Rotterdam down by $12/mt to $554/mt.
  • Singapore up by $1/mt to $652/mt.

Rotterdam’s LNG bunker prices has fallen further amid high gas storage levels, while Singapore’s has been steady even as crude oil gains sharply, reports Engine.

Rotterdam

Rotterdam’s LNG bunker benchmark has declined by $12/mt in the past week. The price has mirrored a $11.99/mt fall in the front-month NYMEX Dutch TTF Natural Gas benchmark and comes amid persistently high gas storage levels. This decline can be mainly attributed to high gas storage levels.

European gas storage levels have reached 58% and exceeded expectations. Milder weather in the northern hemisphere has contributed to lower drawdown rates than initially projected, head of commodities strategy at ING, Warren Patterson commented.

Looking ahead, the forecast for Northwest Europe predicts mild weather conditions for the next two weeks, supporting an upward trend in storage levels. This sets a positive tone indicating manageable storage refilling and potentially full storage ahead of the next winter season.

Despite comfortable storage levels, the upside in prices throughout the year is expected to remain capped. This price stability has been reinforced by the strong footing Europe has established post-winter, mitigating the potential for significant price fluctuations.

Energi Denmark predicts that prices will fall in the near future, barring any unexpected geopolitical events.

Rotterdam’s LNG discount to its VLSFO has widened by $39/mt to $170/mt over the week.

Singapore

Singapore’s LNG bunker price has been roughly steady in the past week. Upward pressure has come from strong regional gas demand from price-sensitive buyers, including countries like India, Pakistan, Bangladesh, and increased interest from China.

LNG remains an attractive bunker fuel option in Singapore. More shipowners are now using LNG instead of conventional fuels, even in Asia, as LNG has become a more affordable choice, a trader says.

Rising Brent values have made VLSFO and other conventional fuels more expensive, whereas cheap natural gas has kept LNG prices relatively more affordable.

This reflects a notable decoupling of oil and gas prices, with gas prices no longer strictly following oil price trends, a trading source told ENGINE.

Did you subscribe to our daily Newsletter?

It’s Free! Click here to Subscribe!

Source: Engine