Energy

Asian spot prices hit all-time seasonal high

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A liquefied natural gas (LNG) tanker is tugged towards a thermal power station in Futtsu, east of Tokyo, Japan November 13, 2017. REUTERS/Issei Kato

HOUSTON, Sept 10 (Reuters) - Asian spot prices for liquefied natural gas (LNG) rose this week to their highest seasonal level on record, as European buyers competed with the East for limited world supply.

The average LNG price for October delivery into Northeast Asia was estimated at about $20.10 per million British thermal units (mmBtu), up $0.20 from the previous week, industry sources said. read more

Prices for November delivery were stretching further towards $21/mmBtu, traders said. The cost of super-chilled fuel, used for power generation, rose ten-fold since the $2/mmBtu seen last year, when the COVID-19 pandemic reduced demand.

Traders in Europe have been trying to recompose stocks ahead of the winter season, when heating consumption rises. European inventories have been under 70% capacity, below the 85% 5-year average, as the continent suffers from lower Russian imports.

"We are running out of time to replenish inventories before it gets cold," a London-based trader said. "And there are not enough cargoes to meet demand from Asia and Europe."

U.S. natural gas futures climbed to a seven-year high earlier this week, while futures in Europe also hit all-time record.

Traders around the world are buying all the LNG that the United States can produce. The amount of gas flowing to U.S. export plants rose from an average of 10.5 billion cubic feet per day (bcfd) in August to 10.7 bcfd so far in September. That compares with a record 11.5 bcfd in April.

Trafigura bought a cargo from Vitol at $20.15 for delivery between October 16-20 to Pipechina Tianjin.

BP PLC offered cargo to be delivered between Oct. 29 and Nov. 2 to the same port for $0.55 below JKM, the Asian reference spot price assessed by S&P Global Platts.

South Korean Kogas is seeking shipments for delivery between November and March.

Reporting by Sabrina Valle; editing by Uttaresh.V

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