--DES Northeast Asia

In the DES Northeast Asia market last week, front month delivery, second-half February, hovered $9.80-10.10, breaking $10.00 once. Plentiful spot supply weighed on the market. Sellers with February delivery cargoes on hand seemed to be in a hurry to sell them. A Japanese company said, "Spreading bearish sentiment in the market prompts sellers to digest their cargoes at an early stage." On Tuesday, British Shell sold a nearby Feb 10-12 delivery at $9.60 to PetroChina. After the deal, JERA and European Vitol still showed selling interest for mid-February delivery. More market players perceived that the supply/demand balance for March delivery would loosen further than that for February delivery. A Japanese city gas company said, "Even if the temperature drops suddenly, the earliest delivery we can buy from now is March, when demand is usually stable. Moreover, we already have reasonable inventories, so we do not need to buy in the spot market."

A Japanese company, however, stated, "Compared to before, the LNG market is falling and buyers felt the current level reasonable. This stimulates spot demand." Chinese and South Korean end-users moved on spot purchase. Four Chinese end-users were said to have procured six to eight cargoes in total for February delivery in the high $9's to low $10's from sellers including European Vitol as well as German RWE on January 9. In addition, one February delivery cargo was reportedly traded in the $9's to a South Korean end-user in the middle of last week.

--FOB Middle East, DES South Asia and the Middle East

Spot demand from Indian end-users was recovering. Indian Oil Corp (IOC) purchased a cargo for late Feb delivery to the 5.00 mil mt/year Ennore terminal through its buy tender that closed on Jan 10. In Kuwait, the Middle East, at the 22.00mil mt/year Al Zour terminal, the first cargo for this year was unloaded on Jan 9. Since the daily highest temperature in March reaches around 30 degrees Celsius in Kuwait every year, Kuwait Petroleum Corp (KPC) usually increases LNG imports from January to February for the preparation of the growing demand.

--FOB Atlantic, DES Europe and South America

In Europe, the medium-range weather forecast renewed on January 10 by Copernicus, an earth observation component of the European Union, indicated that while the Scandinavian peninsula would have a colder-than-average temperature, central and eastern European regions would have wetter-than-average weather. In response to this, a Japanese company said, "Neither the colder-than-average temperature in Scandinavia nor the wet conditions support gas prices because the market size in Scandinavia is small and wet conditions are a neutral factor in gas demand." In South America, the demand from Chile was not strong.