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NATGAS: Asia Gas Demand Supporting JKM Premium over TTF

NATGAS
Energy BulletsBulletPower BulletsCommodities

The JKM premium over TTF has risen to the highest of the year at $2.7/mmbtu from an average of just $0.5/mmbtu in Q1 and $1.5/mmbtu in Q3, according to IEA analyst Greg Molnar.

  • The rise suggests Asia is set to dominate the LNG market ahead of winter.
  • The move is driven by robust Asian demand and weak European fundamentals. Both China and India as seeing near double-digit growth rates with record LNG imports from higher domestic demand. Gas demand in Europe however remains depressed amid lower power sector gas burn and rapid renewables growth.
  • Asian markets also rely more on LNG for seasonal demand balancing due to limited storage capabilities while European gas in store is nearly full.
  • A potential Azerbaijan-Ukraine gas transit deal is also weighing on TTF.

 

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The JKM premium over TTF has risen to the highest of the year at $2.7/mmbtu from an average of just $0.5/mmbtu in Q1 and $1.5/mmbtu in Q3, according to IEA analyst Greg Molnar.

  • The rise suggests Asia is set to dominate the LNG market ahead of winter.
  • The move is driven by robust Asian demand and weak European fundamentals. Both China and India as seeing near double-digit growth rates with record LNG imports from higher domestic demand. Gas demand in Europe however remains depressed amid lower power sector gas burn and rapid renewables growth.
  • Asian markets also rely more on LNG for seasonal demand balancing due to limited storage capabilities while European gas in store is nearly full.
  • A potential Azerbaijan-Ukraine gas transit deal is also weighing on TTF.

 

Keep reading...Show less