LNG: Jun 7-11: DES Northeast Asia prices rise further due to buying massive cargoes by CNOOC
DES Northeast Asia prices rose at $1.25 from end last week to $12.10-12.30 for second-half July delivery. China National Offshore Oil Corporation (CNOOC) bought at least five to six cargoes for July to August delivery and prompt supply rapidly tightened. Traders such as Vitol continued to buy cargoes to cover their short positions while demand from China and Korea was extremely strong. On the other hand, supply room was declining. In addition to Australian projects such as the 5.50 mil mt/year No.3 train at the Gorgon project, several US projects such as the 13.50 mil mt/year Cameron project were experiencing problems and spot supply was reduced. Supply/demand fundamentals therefore tightened. In China, gas demand for power generation was increasing. In South China including Guangdong Province, temperatures were higher than normal and power demand rose sharply. Further, hydropower generation was not increasing due to low rainfall and coal prices from Australia surged to around $120.00, making it difficult to purchase coal for power generation. In Korea as well, with the 950MW No.4 unit at the Shin Kori nuclear power plant shut down due to a fire and with temperatures rising, additional demand for LNG emerged.
--FOB Middle East, DES South Asia, South east Asia and the Middle East
Pakistan LNG (PLL) seemed to have purchased seven cargoes for second-half July through August delivery by the tender closed on 2 July. These cargoes included one for Jul 17-18 delivery awarded at $10.6900 to ENI, one for Jul 28-29 delivery awarded at $10.2937 to BP, two for Aug 2-3 and Aug 7-8 delivery awarded at $10.5200 and $10.5100 respectively to Qatar Petroleum Trading, two for Aug 12-13 and Aug 17-18 delivery awarded at $10.8312 and $10.7451 respectively to Vitol, and one for Aug 27-28 delivery awarded at $10.6900 to DXT Commodities.
--FOB Atlantic, DES Europe and South America
DES European prices rose at 80cts from end last week to $9.80-10.00 for first and second-half July delivery. The Netherlands' TTF natural gas prices rose along with strength in the European carbon emissions market. This in turn pulled up LNG prices. Further, strong demand from Northeast Asia and South America generated concerns that supply for delivery to Europe might be reduced. This stimulated buying interest. On the other hand, pipeline gas supply from Norway to Europe was recovering as maintenance at gas fields and pipelines was progressing smoothly.