What’s driving Asian LNG prices higher?
Asian LNG (liquefied natural gas) spot prices have seen strong upward momentum in recent weeks. The contract for July delivery gained $1.80 per MMBtu (million British thermal units) last week to reach $11.60 per MMBtu. This rise is due to strong demand from China, outages at a few export plants, and large tender buying—especially from emerging and developing countries. Pakistan recently announced a tender of six LNG trains for July and August delivery.
Cheniere Energy (LNG) benefits from an increase in Global LNG prices, which was one of the reasons behind the company’s increase in 2018 guidance.
The above positives might continue to drive momentum in LNG prices. However, the market expects short-term volatility in LNG prices following the OPEC meeting in Vienna. Crude oil is likely to fall further from here on news of an increase in crude oil supplies from OPEC and Russia. This fall would likely pressure global LNG prices. The global gas markets are closely linked to crude oil prices. For a recent update on crude oil prices, see Traders Are Tracking OPEC’s Meeting on June 22.
In the next part of this series, we’ll look at Cheniere Energy’s technical indicators.