LNG Bunker Snapshot: Prices up on colder weather and supply risks

Rotterdam’s LNG bunker price has risen due to colder weather and underground gas storage withdrawals, while Singapore’s price increase is driven by supply concerns.

Changes in weekly LNG bunker prices:

• Rotterdam up by $31/mt to $987/mt
• Singapore up by $15/mt to $879/mt

Rotterdam

Rotterdam’s LNG bunker price has surged for the third consecutive week, rising by $31/mt over the past week to reach $987/mt. This increase is linked to a 3% rise in the front-month Dutch TTF Natural Gas contract, a key European gas benchmark.

According to the Japan Organization for Metals and Energy Security (JOGMEC), the price hike has been driven by “increased demand due to a cold wave and reduced wind and solar power output, and increased withdrawals from underground gas storage.”

“Colder weather forecasts for large parts of the continent continued to drive up European gas prices,” Energi Danmark noted.

Underground gas storage across the EU stood at 49.4% as of 7 February, down from 53.6% at the end of the previous week and 26.2% lower than the same period last year, Gas Infrastructure Europe reported, as cited by JOGMEC.

“Stronger gas demand from the power generation sector, stronger heating demand, and the loss of Russian pipeline flows through Ukraine mean that storage is falling at a quicker-than-expected pace,” Warren Patterson, ING Bank’s head of commodities strategy, commented.

Singapore

Singapore’s LNG bunker price has increased by $15/mt over the past week, driven by “supply concerns over the continued outflow of cargoes to Europe and … the expectation of a cold wave in Asia later in the week,” JOGMEC said.

“The rise can be attributed to updated forecasts of colder weather in Japan and higher gas prices in Europe,” Rystad Energy stated.

The price discount to Rotterdam has widened from $92/mt to $108/mt within a week.

Asian LNG bunker prices typically remain closely linked to NYMEX Japan/Korea Marker (JKM) values. The front-month JKM contract has increased by $0.29/MMBtu ($15/mt) to $14.73/MMBtu ($766/mt) over the previous week.

By Tuhin Roy

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