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NATGAS: East-West LNG Arb Strengthens: Platts

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The East-West LNG arbitrage economics are strengthening as wider price spreads and declining freight rates offer traders more opportunities to send cargoes to the Far East, Platts said.

  • The potential netback for moving a US loading cargo to the Far East has turned positive, increasing the opportunity to divert cargoes.
  • The East-West arbitrage rose to 1.7 cents/MMBtu, compared to minus 23.9 cents/MMBtu Sep. 10 for a cargo travelling via the Cape of Good Hope.
  • The cargo diversions are likely to be supported by good spot demand in China, sources told Platts. However, price sensitive Chinese demand is likely to soften as JKM moves above $13/MMBtu.
  • Weaker demand and a narrowed contango structure in Europe and is also helping to sustain the push towards Asia.
  • The scale of any East-West flows will demand on APAC demand, which will be determined by temperatures as it moves into winter season.
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The East-West LNG arbitrage economics are strengthening as wider price spreads and declining freight rates offer traders more opportunities to send cargoes to the Far East, Platts said.

  • The potential netback for moving a US loading cargo to the Far East has turned positive, increasing the opportunity to divert cargoes.
  • The East-West arbitrage rose to 1.7 cents/MMBtu, compared to minus 23.9 cents/MMBtu Sep. 10 for a cargo travelling via the Cape of Good Hope.
  • The cargo diversions are likely to be supported by good spot demand in China, sources told Platts. However, price sensitive Chinese demand is likely to soften as JKM moves above $13/MMBtu.
  • Weaker demand and a narrowed contango structure in Europe and is also helping to sustain the push towards Asia.
  • The scale of any East-West flows will demand on APAC demand, which will be determined by temperatures as it moves into winter season.