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Red Sea Disruptions Weigh on JKM-TTF Spread

NATURAL GAS

Shipping disruptions in the Red Sea have tightened the JKM-TTF spread as more Middle Eastern LNG flows head towards Asia away from Europe to stay clear of the Suez Canal according to IEA analyst Greg Molnar.

  • No LNG cargoes have transited the Suez Canal since 17 January, ship-tracking data showed.
  • Lengthier and costlier shipping routes to Europe from the Middle East are now incentivising exporters to ship to Asia instead of Europe, weighing on JKM prices.
  • The JKM-TTF spread tightened from around $1.70mmbtu in Nov-Dec 2023 to just below $0.40/mmbtu since the start of 2024, he said.
  • US LNG exports are currently more profitable to Asia throughout August according to BNEF.
  • The US LNG netback to Europe is currently $6.39/MMBtu for March, while the netback to Asia is currently at $6.50/MMBtu for next month.
    • JKM Mar 24 down -0.7% at 9.13$/mmbtu
    • JKM-TTF Mar 24 down -1.3$/mmbtu at 0.28$/mmbtu

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