--DES Northeast Asia

In the DES Northeast Asia market last week, prices fell sharply on Sep 20. Front month delivery prices moved around $12.60-12.90. The Netherlands' TTF natural gas market plunged in response to the news that natural gas from Azerbaijan might be supplied to Europe via Ukraine transit as an alternative to Russian gas. Amid this, demand from Kansai Electric Power Co (KEPCO) was persistently expected in the market.

It was heard last week that KEPCO appeared to have bought a cargo for end-September to October delivery via a buy tender closed on Sep 13. In the Kansai area, power supply/demand was tight as the daily highest temperature still reached 35 degrees Celsius in mid-September. Power supply from LNG-fired thermal power plants was 7.73 GW, accounting for about 29.2%, the largest in the energy mix in the area. Under this situation, sources saw that KEPCO and power companies that were sharing power with KEPCO appeared to have digested LNG rapidly in their inventories.

A city gas company in Central Japan felt that its supply/demand was balanced, including gas demand for industrial use.

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

In Lebanon, walkie-talkies carried by Hezbollah, a pro-Iranian militant group in the country, exploded on Sep 18, following the blowup of pagers on Sep 17. While Hezbollah vowed retaliation, saying the attack was made by Israel, Israel would counter for that. "We need to monitor the situation carefully because of a possible supply outage from Israeli gas fields" (a Japanese company).

--FOB Atlantic, DES Europe and South America

The US Federal Reserve Board (FRB) decided the rate cut on Sep 18. As for the impact of lower interest rates on the LNG market, James Whistler, Managing Director at Vanir Global Markets, said, "A dovish stance from the Fed could enhance investment conditions for US LNG exporters, potentially increasing the supply available to Europe by the decade's end."