Asian December spot LNG prices lowest since 2010

Asian spot LNG prices fell to their lowest December levels since 2010 as a build-up of uncommitted cargoes in the Pacific weighed heavily on the market amid weak economic sentiment, according to theĀ ICIS East Asia Index (EAX).

The December East Asia Index was last assessed on last Friday at $11.094/MMBtu, marking a $3.269/MMBtu fall since it opened as the front month on 16 October. January ’15 EAX fell by $3.725/MMBtu to $11.263/MMBtu over the same period, reflecting further headwinds for sellers expected in the new year.

In the second half of October, sellers initially took confidence after Brent crude appeared to find support at the $86.00/bbl level after the recent heavy sell-off. On 16 October, a December DES cargo from the latest PNG LNG cargo was heard to have closed above $14.00/MMBtu while a deal for H2 January was understood to have been closed just below this level.

Demand from the usual winter sources remained muted as South Korea’s Kogas and most Japanese utilities reported they were unable to absorb further December cargoes. It was left to independent buyers in South Korea and China, as well as China’s state oil companies, to provide some support to the market. As late as 21 October, the highest bid from an East Asian buyer was recorded at $14.00/MMBtu.

Press Release; Image: Kogas