PIRA: LNG spot prices at all time lows despite cold weather

NYC-based PIRA Energy Group reports that LNG demand growth lags new supply increases; spot prices suffer.

The last best hope for price support, colder than normal weather, has failed to emerge in a sustainable fashion in Asia, Europe or North America for a sustainable period of time, driving down spot prices to all time lows.

Last week’s day early holiday reported storage draw was a very long way from a low-to-mid 60s consensus outlook and the second hard to fathom bearish draw within the month (e.g., week ending 11/28/14). Given ongoing sub-normal heating loads and record high production, the draw stayed anemic relative to the standard targets, a mere ~25% of a year ago (193) and about a third of the 5-year average (138).

December U.S. gas exports to Mexico have moved only moderately higher after declining in September. The uptick coincides with cross-border and domestic backbone projects that have either partially or fully entered service. Progress on the bidding process for the next phase of pipeline infrastructure, specifically Mexican domestic pipelines targeting domestic connectivity and redundancy, has been moving forward with two of five projects already declaring winners.

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Press Release; Image: Tepco

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