(Montel) LNG prices for delivery in northwest Europe next month fell 5% over the last week to a two-year low as they tracked sinking TTF hub prices, Spark Commodities data showed on Friday.
The landing price for LNG delivered ex-ship (or DES) in northwest Europe for July fell for the 10th consecutive week and was assessed late on Thursday at USD 6.63/MMbtu (EUR 21.17/MWh), the lowest since Spark began publishing data in May 2021. The price has almost halved since 23 March.
That compares to the latest LNG price assessment for Europe produced by EU regulatory agency Acer of EUR 23.41/MWh (USD 7.90/MMbtu), a 7% drop week on week.
The front month on the Dutch TTF has shed 13% over the last week to settle last at EUR 23.10/MWh.
European LNG prices remain under USD 10/MMbtu until November and rise to USD 12.05/MMbtu in December, according to Spark data on the forward curve.
A widening spread between Asian LNG and European hub prices is also pressuring European LNG prices, said an LNG market source.
“Falling TTF and a wide JKM-TTF spread is driving this,” he added.
Spread to Asia widens
The average profitability, or netback, of shipping a US cargo from Sabine Pass – including cost, insurance and freight – to Europe for a vessel loaded in July was last assessed at USD 6.45/MMbtu, compared to USD 7.39/MMbtu for the Asian route.
The netback spread favouring Asia hovers around USD 1 until November, Spark data showed.
TTF prices also widened the discount to Asian LNG prices to more than USD 2/MMbtu in the front month, with Asia offering a premium of around USD 1/MMbtu for the remainder of the year.
JKM prices hovered around two-year lows, with the benchmark front-month contract setttling on Thursday at USD 9.27/MMbtu (EUR 29.60/MWh), but it lost less than 1% over the week.
LNG became Europe’s single biggest source of gas supply in recent months since Russian pipeline supplies were slashed following the Kremlin’s invasion of Ukraine.
That compares to the latest LNG price assessment for Europe produced by EU regulatory agency Acer of EUR 23.41/MWh (USD 7.90/MMbtu), a 7% drop week on week.
The front month on the Dutch TTF has shed 13% over the last week to settle last at EUR 23.10/MWh.
European LNG prices remain under USD 10/MMbtu until November and rise to USD 12.05/MMbtu in December, according to Spark data on the forward curve.
A widening spread between Asian LNG and European hub prices is also pressuring European LNG prices, said an LNG market source.
“Falling TTF and a wide JKM-TTF spread is driving this,” he added.
Spread to Asia widens
The average profitability, or netback, of shipping a US cargo from Sabine Pass – including cost, insurance and freight – to Europe for a vessel loaded in July was last assessed at USD 6.45/MMbtu, compared to USD 7.39/MMbtu for the Asian route.
The netback spread favouring Asia hovers around USD 1 until November, Spark data showed.
TTF prices also widened the discount to Asian LNG prices to more than USD 2/MMbtu in the front month, with Asia offering a premium of around USD 1/MMbtu for the remainder of the year.
JKM prices hovered around two-year lows, with the benchmark front-month contract setttling on Thursday at USD 9.27/MMbtu (EUR 29.60/MWh), but it lost less than 1% over the week.
LNG became Europe’s single biggest source of gas supply in recent months since Russian pipeline supplies were slashed following the Kremlin’s invasion of Ukraine.
