Rotterdam's LNG bunker price has dropped further amid high gas storage levels, while Singapore's price has dropped due to lower demand.

PHOTO: LNG tanker ship. Getty Image

Changes in weekly LNG bunker prices:

• Rotterdam down by $7/mt to $590/mt
• Singapore down by $9/mt to $667/mt

Rotterdam

Rotterdam's LNG bunker fuel price fell by $7/mt in the past week to $590/mt. This decline mirrors the drops in the front-month NYMEX Dutch TTF Natural Gas benchmark and aligns with abundant gas storage levels in European countries.

Independent Commodity Intelligence Services (ICIS) reports that the recent decline in TTF prices can be attributed to subdued gas demand. This muted demand is a result of reduced gas usage for heating in residential and commercial sectors, coupled with an unusually mild winter in some EU countries, contributing to the downward trend in TTF prices.

The decreasing TTF prices are positive for gas consumers, indicating a potential improvement in the EU and UK gas crisis. However, concerns about price volatility and potential spikes in the upcoming winter persist, suggesting that challenges may still lie ahead, head of Global Gas Analytics at ICIS Tom Marzec-Manser said.

Ongoing maintenance works also continue to affect pipeline supplies from Norway, limiting available volumes, Energi Denmark said.

Gas inventories across Europe are notably high post a mild winter, with Gas Infrastructure Europe (GIE) data indicating storage levels are full at 62%.

Singapore

Singapore’s LNG bunker fuel price fell by $9/mt in the past week. This price decrease is influenced by factors such as the JKM (Japan/Korea Marker) price and market trends in the Asian LNG market. The LNG bunker price drops have mirrored a decline of $9/mt in the underlying JKM gas benchmark.

While LNG remains an attractive option for bunkering, demand softened slightly last week, a trading source said.

“Low demand due to easing geopolitical tensions and ample inventories continued to push price down for a fourth straight day,” State-run Japan Organization for Metals and Energy Security (JOGMEC) said in a report.

Energy analysts at IEEFA caution that the prices of LNG remain volatile. This volatility could pose challenges for the steady growth of LNG demand, especially in regions like South Asia, where buyers are very sensitive to price fluctuations.

However, the long-term pricing trajectory for LNG contracts indicates a downward trend, driven by market oversupply and a prevailing cycle of over-investment, according to Chong Zhi Xin, Senior Director at S&P Commodity Insights.

 By Debarati Bhattacharjee

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