--DES Northeast Asia

In the DES Northeast Asia market last week, prices traded at around $13.05-13.35. The information that natural gas from Azerbaijan might be supplied to Europe via Ukraine transit as an alternative to Russian gas turning out to be false, which reignited supply concerns, along with demand recovery for prompt delivery, supported prices.

Power demand was firm in Japan due to a persistent hot weather. As a result, some power companies seemed to contemplate buying prompt delivery cargoes in order to replenish their inventories. According to some sources, Kyushu Electric Power Co was looking for November delivery cargoes. Further, although the buyers were sketchy, sell tenders for FOB Australia as well as Southeast Asia were awarded as well

Some end-users in South Korea and China were said to have interest to buy prompt delivery. Beijing Gas bid for first-half December delivery at a fixed price. In the middle of last week, major Korean steel manufacturer POSCO reportedly bought a cargo for prompt delivery in the low $13's.

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

The battle has intensified in Lebanon; Israel has conducted airstrikes, while the Hezbollah, a pro-Iranian militant organization in Lebanon, launched one ballistic missile against the headquarters of Israeli intelligence agency Mossad. Moreover, Israel suggested a ground battle, deteriorating situations. If the battle grew to an all-out war across the Middle East, supply disruptions for crude and gas would be difficult to avoid.

--FOB Atlantic, DES Europe and South America

Natural gas from Azerbaijan was reported to be provided to Europe via Ukraine transit. However, the reports were denied from both Azerbaijan and Ukraine, making the sentiments turn bullish in the market. "A preemptive report was priced in the market as of Sep 20, despite a possible talk between Ukraine and Azerbaijan" (a Japanese company).