--DES Northeast Asia

In the DES Northeast Asia market last week, front month delivery hovered around $8.55-8.85 once. Seasonally rising temperatures have limited incentives to buy among end-users, shielding prices.

Several Japanese utilities saw that their long-term contracts could fully cover demands from their clients, not planning to procure cargo in the spot market. A city gas firm in Japan suffered from weak demands, saying, "Demand for industrial use as well as for heating has been weak since last autumn. Along with the low utilization rate of factories, cheap power market prices have reduced gas demand for cogeneration systems. We are not certain how long the trend will continue." Many companies saving the energy to proceed with decarbonization proactively played a part in weakening demand as well.

Supply is ample. Russian Sakhalinskaya Energija appeared to consider selling several cargoes loading from the 10.80 mil mt/year Sakhalin 2 project in May; they might issue a sell tender for that this month. Other than this, the Russian company, which closed a tender on Feb 27 to sell two cargoes for mid-Apr and late Apr delivery, has been recently aggressive in selling cargoes. Regarding the background for that, "Several major clients, including Japanese companies, appeared to exercise the downward quantity tolerance (DQT), especially cargoes from Sakhalinskaya Energija, which suggests the Russian company might be selling cargoes that met cancellation in the spot market," explained a Japanese gas company.

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

Indian state-run Petronet has been moving to expand the 17.50 mil mt/year Dahej terminal located in Gujarat State, in the western part of India. Petronet, the operator of the Dahej terminal, floated a tender to construct the third birth in the terminal, closing in mid-Apr, and planned to increase the capacity by 5 mil mt/year in the next year. In the Middle East, LNG import volumes into Kuwait were forecasted to increase in 2024 following previous years.

--FOB Atlantic, DES Europe and South America

In the US, even though producers were trying to cut production in the wake of recent falling prices for natural gas, some sources had views that it would take some time until the reduction became effective. A Japanese company stated, "While natural gas prices are dropping, crude prices are hopping in a high range close to $80 per barrel, so crude production stay brisk. As associated gas is naturally produced from crude oil gas fields, supply/demand for gas is unlikely to tighten."