LNG traders divert four US cargoes from Europe to Asia
Live Events
(You can now subscribe to our
(You can now subscribe to our Economic Times WhatsApp channel
Four cargoes of liquefied natural gas headed for Europe changed course to Asia in the last two weeks, after European prices fell below the Asian benchmark and opened up an arbitrage for deliveries eastward, according to analysts and shipping data.More cargoes diverting from the Atlantic to the Pacific would increase competition between the two basins, in a year when Europe may need up to an extra 250 LNG cargoes to refill its depleted gas stores ahead of winter.A combination of improved netbacks to Asia and easing European price support, rather than stronger Asian demand, had led to a clear, if narrow, economic case for redirection, said Go Katayama, principal insight analyst at data analytics firm Kpler."JKM premiums over TTF have widened, improving netbacks for U.S.-origin cargoes," he said."This has reopened the arbitrage channel, particularly for June to July delivery windows."The Japan-Korea-Marker (JKM) is the LNG benchmark price assessment for spot physical cargoes in Asia. The Dutch Title Transfer Facility (TTF) is the benchmark for natural gas in Europe.Kpler data showed the Energy Innovator tanker, controlled by Germany's RWE, departed Freeport LNG in Texas on April 7. It was destined for Dunkirk, France before diverting towards the Cape of Good Hope on April 16.The Shell-controlled New Nature tanker also changed course from Europe to head south on April 24, after departing Sabine Pass LNG in Louisiana on April 16.Two more tankers have also seen later arrival dates, suggesting a switch in destinations from Europe to Asia which adds a couple of weeks' travel time, said Alex Froley, senior LNG analyst at data intelligence firm ICIS.The arrival date for the Orion Spirit tanker changed from April 24 to May 14, while the Pacific Success tanker's arrival date changed from April 22 to May 18, he said."The estimated time of arrival on those suggests they switched from a two-week journey across the Atlantic to a longer journey to Asia."Kpler data shows the Orion Spirit and Pacific Success, both controlled by TotalEnergies, were initially bound for Dunkirk, France and Rostock, Germany respectively.Additionally, despite its proximity to Europe, the first loading from the Greater Tortue Ahmeyim project offshore Mauritania and Senegal on the British Sponsor tanker is heading towards Asia, added Froley.Kpler data shows BP's British Sponsor is on course for Singapore."However, Europe should still continue to receive large amounts of LNG, and if storage injection rates start to slow, Europe would likely increase its prices a little to pull more cargoes back," said Froley, adding that Asian demand is not picking up strongly."The change is more about the speed at which both markets have drifted lower in recent weeks on weaker economic expectations."Asian spot LNG prices had been holding at near one-year lows since mid-April as demand remained tepid. They were last at $11.80 per million British thermal units (mmBtu) on April 25.The benchmark front-month contract at the Dutch TTF hub closed at 32.10 euros per megawatt hour on Thursday, or $10.62/mmBtu. It had closed at $10.64/mmBtu on April 25.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Indian Express
an hour ago
- New Indian Express
NATO's chief says the alliance is on the cusp of accepting Trump's 5 per cent defense investment demand
BRUSSELS: Most U.S. allies at NATO endorse President Donald Trump's demand that they invest 5% of gross domestic product on their defense needs and are ready to ramp up security spending even more, NATO Secretary-General Mark Rutte said Thursday. 'There's broad support,' Rutte told reporters after chairing a meeting of NATO defense ministers at the alliance's Brussels headquarters. 'We are really close,' he said, and added that he has 'total confidence that we will get there' by the next NATO summit in three weeks. European allies and Canada have already been investing heavily in their armed forces, as well as on weapons and ammunition, since Russia launched a full-scale invasion of Ukraine in 2022. At the same time, some have balked at U.S. demands to invest 5% of GDP on defense — 3.5% on core military spending and 1.5% on the roads, bridges, airfields and sea ports needed to deploy armies more quickly. Still struggling to meet the old goal In 2023, as Russia's full-scale war on Ukraine entered its second year, NATO leaders agreed to spend at least 2% of GDP on national defense budgets. So far, 22 of the 32 member countries have done so, and others still struggle to do so. Trump and his NATO counterparts appear likely to endorse the new goal at a summit in The Hague on June 24-25. Trump insists that U.S. allies should spend at least 5% so America can focus on security priorities elsewhere, mostly in the Indo-Pacific and its own borders. He has gained important leverage over the other NATO countries by casting doubt over whether the United States would defend allies that spend too little. At the same time, Trump has imposed tariffs on ally and foe alike, citing U.S. security concerns. The new goal would involve a 1.5% increase over the current 2% goal for defense budgets. It means that all 32 countries would be investing the same percentage.
The Print
2 hours ago
- The Print
Rupee falls 26 paise to close at 85.87 against US dollar
At the interbank foreign exchange, the domestic unit opened at 85.69 and moved between the high of 85.69 and a low of 86.05 against the greenback during the day. Forex traders said the local unit remained under pressure on geopolitical tensions between Russia-Ukraine and elevated crude oil prices. Mumbai, Jun 4 (PTI) The rupee depreciated for the second consecutive session and settled for the day lower by 26 paise at 85.87 against the US dollar on Wednesday, largely driven by strong dollar demand from importers. The unit closed the session at 85.87 against the dollar, registering a loss of 26 paise from its previous close. On Tuesday, the rupee depreciated 22 paise to settle at 85.61 against the US dollar. The local unit registered the second consecutive session of fall and has lost 48 paise over the greenback. 'The Indian rupee extended its depreciation for a second consecutive day, emerging as the weakest performer among Asian currencies. This decline was driven by strong dollar demand from importers, a lack of intervention, and weaker-than-expected PMI figures,' said Dilip Parmar, Senior Research Analyst, HDFC Securities. On the domestic macroeconomic front, the Indian services growth broadly steadied in May and was underpinned by healthy demand conditions, new client wins and greater staffing capacity. The seasonally adjusted HSBC India Services PMI Business Activity Index was at 58.8 in May, marginally up from April's 58.7. Market participants are now keenly awaiting the outcome of the Reserve Bank of India's monetary policy meeting for direction trade. The Reserve Bank's rate-setting panel started its three-day brainstorming on monetary policy on Wednesday and the outcome is scheduled to be announced on June 6. Experts are of the view that the RBI may reduce the repo rate by 25 bps on Friday and another similar cut in the next policy. SBI research expects the central bank to go in for a 'jumbo' rate cut of 50 bps in June itself. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.15 per cent at 99.07. Brent crude, the global oil benchmark, rose 0.24 per cent to USD 65.79 per barrel in futures trade. 'Technically, the spot USDINR has broken out upwards, forming a bullish chart pattern. The bias for the pair has turned positive, suggesting a further appreciation towards 86.50 in the coming days, with support now established at 85.30,' Parmar added. In the domestic equity market, the 30-share BSE Sensex surged 260.74 points, or 0.32 per cent, to close at 80,998.25, while the Nifty rallied 77.70 points, or 0.32 per cent, to 24,620.20. Foreign institutional investors (FIIs) purchased equities worth Rs 1,076.18 crore on a net basis on Wednesday, according to exchange data. PTI DRR TRB This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Mint
2 hours ago
- Mint
Wall Street Live: US stocks drop on economic slowdown concerns, Tesla sheds 4.5%
US stocks fell on Thursday on concerns of economic slowdown on the back of the US tariff war and ahead of Friday's jobs data. At 10:20 AM ET, the Dow Jones Industrial Average fell 126.69 points, or 0.30%, to 42,301.05, the S&P 500 lost 12.71 points, or 0.21%, to 5,958.10 and the Nasdaq Composite lost 31.13 points, or 0.16%, to 19,429.36. At the open, the Dow Jones Industrial Average rose 60.2 points, or 0.14%, to 42487.89. The S&P 500 rose 14.9 points, or 0.25%, to 5985.67, while the Nasdaq Composite rose 57.7 points, or 0.30%, to 19518.197. In terms of economic data, the US trade deficit narrowed sharply in April as imports fell by the most on record. The Commerce Department's Bureau of Economic Analysis said on Thursday the trade gap contracted by a record 55.5% to $61.6 billion, the lowest level since September 2023. Imports declined by a record 16.3% to $351.0 billion in April. The yield on the 10-year Treasury fell to 4.34% from 4.37% late on Wednesday. Tesla shares shed 4.5% as the automaker's sales dropped for the fifth straight month in several European markets. Procter & Gamble shares fell 1.3% after the consumer goods bellwether said it will cut 7,000 jobs over the next two years. Brown-Forman stock dropped 14.9% after the Jack Daniel's maker forecast a fall in annual revenue and profit. Five Below stock rallied 7.9% after the retailer reported a stronger quarterly profit. MongoDB jumped 17.2% after the database company delivered a stronger profit than expected. Gold prices gained on Thursday as investors looked forward to US non-farm payrolls data due on Friday. Spot gold was up 0.6% at $3,395.29 an ounce, as of 1147 GMT. US gold futures rose 0.6% to $3,419.70. Spot silver jumped 2.5% to $35.83 per ounce. Platinum rose 3.6% to $1,123.88 and palladium was up 1.8% at $1,018.38. Oil prices advanced on Thursday after Chinese state media reported that President Xi Jinping spoke with US President Donald Trump by phone.
