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LNG: European LNG Spot Prices Struggling Vs Oil-Linked Contracts: Platts

LNG
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European LNG spot prices struggle to compete with oil-linked term contracts as the overarching bearish sentiment in crude oil contrasts with winter risks for gas supplies, Platts said.

  • On current market dynamics, oil-linked contracts with a 13.5% upper bound slope (the most bullish scenario), spot prices carry a premium of $2.08/MMBtu over term volumes, the strongest level since Nov. 28.
  • Outages and maintenance at key natgas and LNG facilities has buoyed some spot buying in Europe compared to 2023, although term contracts have risen on the year.
  • Of the 69.95m mt of LNG imported in Europe in 2024 thus far, 57% were contractual volumes, 41% spot, and the rest unconfirmed. This compares to 71:29 contractual v spot in 2023.
  • The bearish oil market is pressuring European gas markets, leading to expectations of tighter winter balances which could boost global LNG prices as competition for cargoes heats up.

 

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European LNG spot prices struggle to compete with oil-linked term contracts as the overarching bearish sentiment in crude oil contrasts with winter risks for gas supplies, Platts said.

  • On current market dynamics, oil-linked contracts with a 13.5% upper bound slope (the most bullish scenario), spot prices carry a premium of $2.08/MMBtu over term volumes, the strongest level since Nov. 28.
  • Outages and maintenance at key natgas and LNG facilities has buoyed some spot buying in Europe compared to 2023, although term contracts have risen on the year.
  • Of the 69.95m mt of LNG imported in Europe in 2024 thus far, 57% were contractual volumes, 41% spot, and the rest unconfirmed. This compares to 71:29 contractual v spot in 2023.
  • The bearish oil market is pressuring European gas markets, leading to expectations of tighter winter balances which could boost global LNG prices as competition for cargoes heats up.

 

Keep reading...Show less