Warm European Weather Eases Pressure on Global LNG Supply

Falling European gas prices due to warmer weather have eased the pressure on global LNG markets and seen closing spreads between Europe and Asia.

• The discount of the price of NW Europe LNG cargoes to TTF has closed to the narrowest since March according to Spark Commodities. The SparkNWE LNG Basis price has closed to -1.85$/mmbtu compared to as much as -22.47$/mmbtu in late September.
• The JKM-TTF spread has moved from a JKM discount of nearly -10$/mmbtu on 16 Dec to a current +4$/mmbtu premium.
• The US LNG netback to Europe is estimated at 26.53$/mmbtu compared to 27.48$/mmbtu to Asia. A week ago the US netback to Europe was more than 10$/mmbtu higher than to Asia.
• Despite the changing spreads, LNG imports to Europe remain strong with flows to NW Europe just below record levels of 332mcm/d on 18 Dec.
  • TTF JAN 23 down -6% at 99.36€/MWh
  • NBP JAN 23 down -6.5% at 245.5p/th
  • JKM Jan 23 down -2.3% at 34.92$/mmbtu
  • JKM-TTF Jan 23 up 1.5$/mmbtu at 4.06$/mmbtu
  • US Natgas JAN 23 up 1.9% at 5.43$/mmbtu