Rotterdam LNG Prices Decline Amid Improved Supply Prospects

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  • Rotterdam’s LNG bunker price has declined by $4/mt in the past week.
  • Singapore’s LNG bunker price has remained steady over the past week.

Rotterdam’s LNG bunker prices have decreased due to improved supply signals from Norway’s gas field, while Singapore’s prices remained stable, reports Engine.

Rotterdam

Rotterdam’s LNG bunker price has declined by $4/mt in the past week. This decline mirrors the drops in the front-month NYMEX Dutch TTF Natural Gas benchmark and aligns with abundant gas storage levels in European countries.

Factors such as enhanced supply from Norway’s Dvalin gas field and steady supply across Europe have also contributed to the price drop. As temperatures rise in Europe, prices are anticipated to follow a downward trajectory, said Danish energy agency Denmark Energi.

Looking ahead, market expectations point towards a further decline in gas prices during the injection season. The injection season is when natural gas storage facilities are filled with gas, typically during warmer months when demand is lower. This process ensures an adequate supply of gas is available to meet the higher demand during the colder months.

Towards the year’s end, potential supply risks may escalate as Russian gas firm Gazprom’s transit agreement with Ukraine approaches expiration. Ukraine’s stance on not renewing the agreement poses a risk to the EU’s annual gas supply, according to the head of commodities strategy at ING, Warren Patterson.

Singapore

Singapore’s LNG bunker price has remained steady over the past week. The Japan/Korea Marker (JKM) price recorded a marginal increase from $10.47/MMBtu to $10.48/MMBtu last week.

This slight uptick was supported by an outage at Australia’s Gorgon LNG plant, one of the biggest facility with a capacity of 15.6 million mt/year. The plant exports substantial LNG volumes to Asian countries.

A report from the Japan Organisation for Metals and Energy Security (JOGMEC) also noted early decreases in JKM prices due to low demand and high inventories, followed by a recovery later in the week. This rebound was fuelled by supply worries stemming from the Gorgon LNG facility.

With European storage facilities at seasonal highs of 64%, there is little incentive to compete with Asia for LNG,” energy analyst at Hynes Commodities said. “That could change quickly, with the risk of supply disruptions remaining high amid the Russia-Ukraine war,” the analyst noted.

Moreover, LNG exports from the US rose last week, with the Freeport LNG terminal dispatching three cargoes during this period, as per the EIA’s data.

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Source: Engine