Tepid Demand Limits LNG Diversions to Asia as JKM Back Above TTF

The pull back in European gas has allowed the front month JKM contract to move back to a premium to TTF. The JKM-TTF spread reached a low of -5.6$.mmbtu on 15 June but has since recovered back up to a high of +1.3$/mmbtu today as TTF prices have pulled back.

• JKM was at a premium to TTF from 10 May to 8 June before the TTF price surge but flexible LNG supplies from the US didn’t increase despite favourable spreads according to Bloomberg. This is expected to persist for the rest of summer due to tepid demand for spot shipments in Asia.
• Spot LNG prices in Northeast Asia have dipped on fresh concern for the pace of demand and with the pull back in TTF amid high inventories still in Europe and Japan.

• Before the extended TTF pull back today, the US LNG netbacks were showing just in favour of flows to Europe over Asia according to Bloomberg. The profitability of US LNG to Europe for August was 7.85$/mmbtu and to Asia was 7.31$/mmbtu.
  • TTF JUL 23 down -6.9% at 32.6€/MWh
  • NBP JUL 23 down -7.4% at 80.74p/th
  • JKM Jul 23 up 16.9% at 11.2$/mmbtu
  • JKM-TTF Jul 23 up 1.8$/mmbtu at 0.93$/mmbtu
  • US Natgas JUL 23 down -0.7% at 2.61$/mmbtu