LNG: LNG Competiion to Support European Prices Towards Winter

LNG competition is to support European prices approaching winter although imports are set to remain subdued over summer amid good storage injection rates and with Asian prices maintaining a premium over Europe, according to Montel.

• June LNG arrivals to Europe, including the UK and Turkey, fell to their lowest since October 2021 and set to fall further in July towards levels seen in summer 2021, according to Kpler.
• Asia continues to be the premium market for US LNG until at least Jan 2025, according to BNEF amid robust demand due to high summer temperatures. For September delivery, Asia earns a netback of $9.07/mmbtu but Europe earns a netback of $7.57/mmbtu for July.
• “Asian prices are expected to remain above Europe for the rest of the summer, said Alex Froley at ICIS but Europe “can’t drop so far behind Asia that storage injections completely drop off”.
• Europe’s market share of imports fell from 33% in Q2 2023 to 24% in Q2 2024, while East Asia’s share of imports rose from 45% to 50%. 
• “If there aren’t too many unexpected outages then at the end of summer when European onshore storage should be near full, we may start to see a build-up of floating storage offshore Europe as we have seen around October/November in recent years,” said Froley.