Gas JKM-TTF Spread Increases to Favour US Spot LNG to Asia over Europe

An increasing premium of Asia gas prices over Europe increases the risk to spot LNG deliveries to Europe. Spot cargoes could start to divert away from Europe to Asia if the bearish trend in TTF continues.

• The front month JKM-TTF spread has traded up to +2$/mmbtu again today as the US netbacks currently encourage spot deliveries to Asia over Europe. The profitability of US LNG exports to Europe for July has fallen to 4.32$/mmbtu while to Asia has increased to 5.95$/mmbtu according to Bloomberg.
• The netbacks also favour US LNG flows to Asia over Europe throughout the remainder of 2023.
• European LNG net import flows have averaged around 436mcm/d over the last week and roughly in line with the average seen during May but down from the record levels seen in April.
  • TTF JUL 23 up 0.4% at 23.19€/MWh
  • NBP JUL 23 up 1.6% at 55.13p/th
  • JKM Jul 23 up 0.7% at 9.27$/mmbtu
  • JKM-TTF Jul 23 down 0$/mmbtu at 1.84$/mmbtu
  • US Natgas JUL 23 up 0.8% at 2.18$/mmbtu