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Khaleej Times
2 days ago
- Business
- Khaleej Times
Asia's LNG imports stay soft in July as Europe draws cargoes
Asia's run of subdued imports of liquefied natural gas (LNG) is set to extend for another month in July, with the top-importing region on track for a tiny increase from June. Asia's imports of the super-chilled fuel are estimated at 22.07 million metric tons in July, up from 21.80 million in June, according to data compiled by commodity analysts Kpler. On a per day basis July's figure is 722,000 tonnes, which is slightly down from 727,000 in June. The soft July imports continue a trend this year of declining LNG arrivals in Asia, with the first seven months of 2025 coming in at 155.82 million tonnes, down 6.3% from the 166.22 million over the same period last year. In contrast to Asia's declining LNG imports, Europe's have been trending higher, with the first seven months seeing arrivals of 75.61 million tonnes, up 24% from the 61.13 million for the same period in 2024, according to Kpler data. The extra 14.48 million tonnes of LNG that has headed to Europe in the first seven months reflects the continent's efforts to refill inventories ahead of winter while continuing to shun pipeline gas from Russia. The extra European demand has been a boon for LNG exporters as it has helped keep global prices higher, and largely prevented the usual seasonal decline in both volumes and spot prices seen in the shoulder season between the winter and summer peaks. But the higher prices have also led to lower demand from price-sensitive buyers in Asia, especially China, the world's largest LNG importer. China decline China's LNG imports are on track to reach 4.96 million tonnes in July, down from 5.09 million in June and 5.92 million in July 2024, according to Kpler data. For the first seven months of the year, China's imports are estimated by Kpler at 35.17 million tonnes, down 21.2% from the 44.64 million for the same period in 2024. The drop in China's LNG imports also accounts for 91% of the total drop in Asia's imports in the first seven months of 2025. The rest of the decline can largely be ascribed to India, Asia's fourth-largest LNG buyer, with imports in the January to July period estimated at 14.08 million tons, down from 16.11 million for the same period in 2024. The decline in imports by China and India comes as spot LNG prices for delivery to North Asia remain at elevated levels. The spot price dropped to $12.33 per million British thermal units (mmBtu) in the week to July 14 from $12.90 the prior week. While this is similar to the $12.00 per mmBtu that prevailed in the same week in 2024, what is different so far in 2025 is that the lowest price so far, of $11.00 in late April, is well above the low point of $8.30 in February 2024 and $9.00 in June 2023. The fact that spot prices didn't have their usual seasonal decline after the northern winter meant that Chinese buyers were unable to pick up cargoes at economical prices. A spot price of above $10-$11 per mmBtu is believed to make LNG imports uncompetitive against domestic output and pipeline supplies from Russia and Central Asia. It's also the case that China has been producing more domestic natural gas, with official data showing output rising 5.8% in the first half of 2025 to the equivalent of 96.8 million tons, an increase of about 5 million tons. Pipeline imports have also increased by about 6%, or 3 million tons. However, the combined rise in domestic output and pipeline imports is still below the decline of nearly 9.5 million tons in LNG imports, suggesting that the high LNG spot price is acting to reduce demand.
Reuters
2 days ago
- Business
- Reuters
Asia's LNG imports stay soft in July as Europe draws cargoes
LAUNCESTON, Australia, July 21 (Reuters) - Asia's run of subdued imports of liquefied natural gas (LNG) is set to extend for another month in July, with the top-importing region on track for a tiny increase from June. Asia's imports of the super-chilled fuel are estimated at 22.07 million metric tons in July, up from 21.80 million in June, according to data compiled by commodity analysts Kpler. On a per day basis July's figure is 722,000 tons, which is slightly down from 727,000 in June. The soft July imports continue a trend this year of declining LNG arrivals in Asia, with the first seven months of 2025 coming in at 155.82 million tons, down 6.3% from the 166.22 million over the same period last year. In contrast to Asia's declining LNG imports, Europe's have been trending higher, with the first seven months seeing arrivals of 75.61 million tons, up 24% from the 61.13 million for the same period in 2024, according to Kpler data. The extra 14.48 million tons of LNG that has headed to Europe in the first seven months reflects the continent's efforts to refill inventories ahead of winter while continuing to shun pipeline gas from Russia. The extra European demand has been a boon for LNG exporters as it has helped keep global prices higher, and largely prevented the usual seasonal decline in both volumes and spot prices seen in the shoulder season between the winter and summer peaks. But the higher prices have also led to lower demand from price-sensitive buyers in Asia, especially China, the world's largest LNG importer. China's LNG imports are on track to reach 4.96 million tons in July, down from 5.09 million in June and 5.92 million in July 2024, according to Kpler data. For the first seven months of the year, China's imports are estimated by Kpler at 35.17 million tons, down 21.2% from the 44.64 million for the same period in 2024. The drop in China's LNG imports also accounts for 91% of the total drop in Asia's imports in the first seven months of 2025. The rest of the decline can largely be ascribed to India, Asia's fourth-largest LNG buyer, with imports in the January to July period estimated at 14.08 million tons, down from 16.11 million for the same period in 2024. The decline in imports by China and India comes as spot LNG prices for delivery to North Asia remain at elevated levels. The spot price dropped to $12.33 per million British thermal units (mmBtu) in the week to July 14 from $12.90 the prior week. While this is similar to the $12.00 per mmBtu that prevailed in the same week in 2024, what is different so far in 2025 is that the lowest price so far, of $11.00 in late April, is well above the low point of $8.30 in February 2024 and $9.00 in June 2023. The fact that spot prices didn't have their usual seasonal decline after the northern winter meant that Chinese buyers were unable to pick up cargoes at economical prices. A spot price of above $10-$11 per mmBtu is believed to make LNG imports uncompetitive against domestic output and pipeline supplies from Russia and Central Asia. It's also the case that China has been producing more domestic natural gas, with official data showing output rising 5.8% in the first half of 2025 to the equivalent of 96.8 million tons, an increase of about 5 million tons. Pipeline imports have also increased by about 6%, or 3 million tons. However, the combined rise in domestic output and pipeline imports is still below the decline of nearly 9.5 million tons in LNG imports, suggesting that the high LNG spot price is acting to reduce demand. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, opens new tab and X, opens new tab. The views expressed here are those of the author, a columnist for Reuters.
Yahoo
03-07-2025
- Business
- Yahoo
Standard Chartered: Oil Markets Can Easily Absorb Extra OPEC+ Barrels
Oil markets kicked off the new year in a downbeat mood, with Wall Street analysts almost unanimously predicting a huge oversupply in 2025 even if OPEC+ did not add a single barrel back into the market. Well, it's six months on, and oil markets have continued to defy these bearish expectations. The eight OPEC+ countries that made additional voluntary cuts in 2023 are set to meet on July 6, with expectations that the ministers will continue the unwinding of the November 2023 tranche of cuts, increasing targets by 411 thousand barrels per day (kb/d) for the fourth successive month. Commodity analysts at Standard Chartered have also predicted a final 411kb/d increase will be announced at the August meeting, resulting in the full unwinding of the voluntary cuts that totalled about 2.2 million barrels per day (mb/d). Thankfully, the rapid unwinding of the cuts has proved to be a highly successful strategy, with oil markets having little trouble absorbing the extra barrels. Inventories remain very low, while the prompt market remains backwardated and with the previous market fears of historic surplus giving way to a general acceptance that fundamentals entered the year stronger than most traders believed with demand remaining robust. The latest EIA weekly data was bullish, with crude oil inventories falling 5.84 mb w/w to 415.11 mb, taking them 45.59 mb lower y/y and 51.39 mb below the five-year average. Indeed, crude inventories are currently just 5.16 mb above their five-year low, having declined by 28.05 mb (801kb/d) over the past five weeks alone while the deficit to the five-year has widened to the largest since June 2022. Distillates remain the tightest oil product group: distillate inventories fell counter-seasonally by 4.07 mb w/w to 105.33 mb, increasing the deficit below the five-year average by 4.44 mb to -26.3 mb. Implied gasoline demand rose 389 kb/d w/w to 9.68 mb/d, the highest weekly reading since Christmas 2021. The 30 June release of the EIA's Petroleum Supply Monthly revised April gasoline demand higher by 30 kb/d to 8.91 mb/d, taking the y/y increase from 0.8% to 1.1%. Total April oil demand was revised 488 kb/d higher to 20.213 mb/d, good for a y/y increase of 0.6%. StanChart has predicted that oil markets will continue to absorb extra OPEC+ production easily in the short term, and has even forecast a global stock draw of 0.9 mb/d in the third quarter following a 0.2 mb/d build in the June quarter. According to the analysts, the tightening in Q3 will primarily be the result of a 1.4 mb/d q/q increase in demand while non-OPEC+ output is expected to remain fairly flat. However, StanChart has warned that the lack of compliance to set quotas by the likes of Kazakhstan could become a more significant issue when the seasonal demand strength starts abating in the fourth quarter of the current year or the first quarter of 2026. Still, the experts say OPEC+ may not need to curtail production in Q1 2026, with the projected stockbuild not likely to be any larger than normal while inventories will be starting from very low levels. However, the first line of cuts is likely to come from the overproducers if the situation does indeed warrant some production cuts. Meanwhile, EU natural gas inventories have continued to rise at a rapid clip, with the y/y deficit narrowing on 32 of the past 34 days while the deficit below the five-year average has narrowed on 25 of the past 32 days. According to Gas Infrastructure Europe (GIE) data, EU inventories clocked in at 67.98 billion cubic meters (bcm) on 29 June, 21.58 bcm lower y/y and 10.37 bcm below the five-year average. The w/w build was 2.70 bcm, 16.5% higher than the five-year average. The EU inventory builds are being driven by higher LNG flows. According to StanChart data based on European Network of Transmission System Operators for Gas (ENTSOG) daily data, LNG flows into the EU averaged 429 million cubic metres per day (mcm/d) over the past five months, considerably higher than 342 mcm/d average for last year's corresponding period. EU gas demand remains subdued at 796 mcm/d, good for a y/y decline of 2.8%. European gas prices remain exposed to significant downside risk, with a potential path below EUR 30 per megawatt hour (MWh) thanks to weak demand, stronger-than-usual inventory builds, poor market technicals and reduced concerns about LNG supply disruptions due to the Middle East Alex Kimani for More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
