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LNG Natural Gas Market Update – 22nd – 26th May 2017

Market Analysis

Crude Oil

  • Crude Oil started strong primarily on expectation of rumors of further production cut and rallied strongly till 25th May 2017. On Friday Brent was trading at $52.23/BBL decrease by $2.44 from the peak of $54.67/bbl.
  • Profit taking was observed on 24th May 2017 primarily on OPEC production cut along with positive inventory numbers of EIA for the week of 19th May 2017. As per EIA report US crude inventory now at 516.3 million barrel, fell by 4.4 million barrel more than the expected forecast of 2.4 million barrel decline and gasoline also recorded larger than expected draw of 3.15 million barrels following last week draw of 2.4 million barrels.
  • Gasoline prices also up in USA due to Memorial Day holiday.
  • BHI weekly data depicted oil rig increase by 2 and gas rig increase by 5. Overall rig count is 908.
  • Looking at Crude oil inventories and US increased production, OPEC needs to focus on deeper production cut to ensure Crude price to move north. Production cut period extension already absorbed in the market and fundamentally crude remain bearish.

Natural Gas

  • Natural gas prices rebounded on Monday, climbing 2.18% primarily on the forecast of warmer than normal weather covering the entire eastern seaboard of the United States increasing cooling demand however market corrected next day as there were short selling by speculative buyers.
  • EIA reported larger than expected build in natural gas inventories on Thursday with 2,444 BCF of working gas, a net increase of 75 BCF from the previous week.
  • Henry Hub was stable on Friday as outlook for next two weeks is increased demand due to warmer weather across USA.
  • Warm weather in Europe continues to reduce demand, which has resulted in 5.47% decrease in UK NBP, 3.42% at ZTP, TTF down by 2.01% and France witnessed downward movement by 2.00%.
  • Prices in Spain gained by 2.59% primarily due to hot weather and increased demand for air conditioning as this is peak tourist season in Spain

Currency

  • US Dollar remained up and down with DXY index went as low as 96.83 and con Friday was 97.40. The volatility is primarily on political uncertainty due on ongoing FBI investigation.
  • The pound started strong in the beginning of week, however lost ground on Thursday on downward revision of UK Q1 GDP and can fall further. AT the time of writing the report the GBP/USD was 1.28096.
  • Euro has depicted strength throughout the week primarily on news and statement generating from Germany. Monday it was the statement of German Chancellor, which boasted Euro, whereas Tuesday elevated German CPI and news of improved employment data, which is expected at 5.8%. Euro on Friday was trading at 1.1180.

Weather

  • Spring converging into summers in Europe: Spain recorded 30oC, Portugal highest was 24oC , UK 26oC, France 27oC, Germany 25oC, Netherland 24oC & Belgium 25oC during the week and same is forecasted for next week.
  • Mild to hot temperature in South America with Argentina from 18oC -22oC and Brazil 30oC -35oC .
  • Hot summers in in Mexico with temperature ranging 35oC – 39oC .
  • Middle east is now in summer season with Egypt around 35oC degrees, Kuwait City and Dubai temperature around 40oC and rising.
  • Indian Subcontinent also around same temperature profile of low 30o
  • Summer season in North East Asia, with temperature around 30oC in Taiwan, 28oC in Korea, China in high 20oC and Japan is  around 24oC. South East Asia already in hot weather with temperature in low 30oC

LNG

  • North Asian buyers from Japan, Korea, and Taiwan are on the side lines as they have secured their June and July demand.
  • Overall supply seems ample with additional supply in the form of test cargo from Australia’s Wheatstone project is due from June and Cheniere Sabine Pass train 4 expected to start production in September 2017.
  • Sakhalin II is expected to issue a tender next week for July loading whereas Angola LNG issues a tender for end June loading and Nigeria is offering three cargoes for June loading.
  • Inventory levels are high in India, Dabhol port is closed due to monsoon whereas rest of the demand is covered through contractual volumes.
  • Argentina is seeking 16 cargoes for delivery during July and October, whereas market is expecting demand from Korea in August as 10 coal fired power plant are set to shut off next month.
  • European hub gas future market for June, July & August 2017 remained stable primarily due to the summer season. Spain, Italy, and Germany will remain be attractive markets for US, Trinidad and Algerian suppliers.
  • Seven LNG cargoes are currently scheduled to arrive in northwest Europe through the first 10 days of June.
  • Guanghui Energy’s Qidong LNG terminal in Jiangsu province will receive its first cargo on 5 June.
  • GAIL India intends to make Dabhol LNG terminal as all weather import terminal by 2019.
  • Sri Lanka also planning to join the LNG import club, India and Japan will collaborate on setting up  2 MTPA import facility.
  • Sharjah, UAE also entering in LNG import club with Sharjah National Oil Company (SNOC) with Uniper to supply LNG to power stations. The project comprises of setting up a FSRU based import setup at Hamriyah port.
  • Netherland is set to receive its first cargo from US Sabine Pass terminal.
  • Indian GAIL reported to sign a time swap deal with a trader to buy 15 cargoes and sell 10 cargoes from Sabine Pass from 1018.
  • BP has started producing gas from Taurus and Libra fields in West Nile Delta, Egypt. There are five gas fields with production to reach 1.3 BCF/D, which will further reduce Egypt LNG imports.

 

LNG Merchant Activity

  • This week 69 vessels carrying 4.23 million tons (216.00 BCF) loaded from various supply centres. An increase of 84.49 BCF from last week.
  • Seven vessels carrying 21.49 BCF departed from Nigerian port for European locations.
  • Two vessels left from Equatorial Guinea carrying 6.57 BCF.
  • Algeria loaded two vessels for European destinations, whereas one vessel loaded from Angola, total 6.25 BCF.
  • PNG loaded one cargo of 3.00 BCF for Japan.
  • Pont Fortin, Trinidad & Tobago loaded four vessels with11.63 BCF.
  • 3 vessels loaded this week from Sabine Pass, USA with 10.08, one vessel is heading for BCF Netherland.
  • Three vessels loaded from Brunei with total quantity of 9.19 BCF.
  • Two vessels departed from Russia carrying 6.02 BCF.
  • 13 vessels left from Australian export terminals of Dampier and Gladstone ports for Japan, China and Singapore carrying 42.08 BCF.
  • Milford Haven UK, re-exported one cargo to Spain.
  • Middle Eastern terminals at Das Island (UAE), Qalhat (Oman) and Ras Lafan (Qatar) loaded 26 vessels carrying 83.88 BCF for Asian destinations.
Departure DateVessel NameCapacity(CBM)Loading PortDischarge Port
22-May-17LNG CROSS RIVER142,656Bonny, NigeriaTenerife, Spain
21-May-17LNG OYO142,988Bonny, NigeriaBilbao, Spain
21-May-17GOLAR KELVIN162,000Bonny, Nigeria
23-May-17LNG OYO142,988Bonny, NigeriaBilbao, Spain
24-May-17LNG LOKOJA148,471Bonny, NigeriaHuelva, Spain
26-May-16LNG RIVER NIGER142,656Bonny, NigeriaWest Africa
25-May-17GOLAR PENGUIN160,000Bonny, NigeriaNot Known
22-May-17PACIFIC ARCADIA145,400Lese, Papua New GuineaKawasaki, Japan
22-May-17VALENCIA KNUTSEN173,400Punta EuropaNot Known
26-May-16METHANE ALISON VICTORIA145,000Punta EuropaAtlantic Basin
24-May-17GLOBAL ENERGY74,130Skikda, AlgeriaLa Speza, Italy
26-May-16CHEIKH EL MOKRANI73,990Skikda, AlgeriaSagunto, Spain
23-May-17SOYO154,948Soyo, AngolaNot Known
23-May-17SCF MELAMPUS170,200Peru LNG, PeruNot Known
22-May-17BW GDF SUEZ BOSTON138,059Point Fortin, TrinidadNot Known
20-May-17GALEA135,269Point Fortin, TrinidadNot Known
24-May-17BRITISH EMERALD154,983Point Fortin, Trinidad
26-May-16SESTAO KNUTSEN135,357Point Fortin, Trinidad
22-May-17CLEAN OCEAN162,000Sabine Pass, USANot Known
25-May-17MARAN GAS APOLLONIA164,000Sabine Pass, USA
26-May-16COOL VOYAGER160,000Sabine Pass, USAAtlantic Ocean
25-May-17SERI ALAM145,572Bintulu, MalaysiaNot Known
24-May-17LNG PORTOVENERE65,272Bintulu, MalaysiaNot Known
24-May-17SENSHU MARU125,835Bontang, IndonesiaOita, Japan
23-May-17GRAND ANIVA145,000Prigorodnoye, RussiaTaichung, Taiwan
25-May-17AMUR RIVER146,748Prigorodnoye, Russia
23-May-17Al Amadi155,000Sseria Oil Terminal, BruneiNot Known
25-May-17Amadi155,000Sseria Oil Terminal, Brunei
26-May-16ABADI135,269Sseria Oil Terminal, BruneiNot Known
21-May-17DAPENG STAR147,200Dampier, AustraliaDapeng, China
21-May-17WOODSIDE ROGERS159,800Dampier, AustraliaPacific Ocean
20-May-17NORTHWEST SWAN140,500Dampier, AustraliaMizushima, Japan
23-May-17TRINITY GLORY152,675Dampier, AustraliaNot Known
25-May-17PACIFIC ENLIGHTEN147,800Dampier, AustraliaOita, Japan
24-May-17NORTHWEST SEAEAGLE125,541Dampier, AustraliaPacific Ocean
26-May-16ENERGY HORIZON177,441Dampier, AustraliaAnegasaki, Japan
25-May-17PACIFIC ENLIGHTEN147,800Dampier, AustraliaOita, Japan
20-May-17CESI QINGDAO205,000Gladstone, AustraliaNingbo, China
23-May-17METHANE PATRICIA CAMILA167,416Gladstone, AustraliaTokyo, Japan
23-May-17PALU LNG159,800Gladstone, AustraliaPacific Ocean
25-May-17K.MUGUNGWHA148,776Gladstone, AustraliaIncheon, Korea
25-May-17MARAN GAS TROY159,800Gladstone, AustraliaPacific Ocean
26-May-16BU SAMRA260,928Milford Haven, UKLas Palmas, Spain
20-May-17AL HAMRA137,000Das, UAENot Known
24-May-17LNG PIONEER138,000Das, UAENot Known
22-May-17LNG MARS153,000Qalhat, OmanJapan
23-May-17LNG MARS153,000Qalhat, OmanJapan
25-May-17HYUNDAI AQUAPIA134,400Qalhat, OmanPyeongtaek, Korea
22-May-17SK SUNRISE135,505Ras Laffan, QatarPyeongtaek, Korea
22-May-17DUKHAN137,622Ras Laffan, QatarEgypt
22-May-17AL KHARAITIYAT211,986Ras Laffan, QatarFar East
22-May-17UMM BAB143,708Ras Laffan, QatarPort Qasim, Pakistan
22-May-17AL MARROUNA149,539Ras Laffan, QatarEgypt
21-May-17RAAHI138,077Ras Laffan, QatarDahej, India
22-May-17AL SHAMA147,200Ras Laffan, QatarDubai, UAE
21-May-17AL HUWAILA214,716Ras Laffan, QatarChiba, Japan
20-May-17AL RAYYAN134,671Ras Laffan, QatarNagoya, Japan
20-May-17TAITAR NO.1154,948Ras Laffan, QatarTaichung, Taiwan
23-May-17AL KHOR135,295Ras Laffan, QatarJoetsu, Japan
25-May-17DISHA136,026Ras Laffan, Qatar
25-May-17AL SAFLIYA210,100Ras Laffan, QatarMataphut, Thailand
25-May-17AL ORAIQ205,994Ras Laffan, QatarIndian Ocean
25-May-17TAITAR NO.2144,627Ras Laffan, QatarTaichung, Taiwan
24-May-17GOLAR SEAL160,000Ras Laffan, Qatar
24-May-17AL KHOR135,295Ras Laffan, QatarJoetsu, Japan
24-May-17ASEEM154,948Ras Laffan, QatarDahej, India
24-May-17KITA LNG159,800Ras Laffan, QatarIndian Ocean
26-May-16HYUNDAI COSMOPIA134,308Ras Laffan, QatarPyeongtaek, Korea
26-May-16AL SADD205,963Ras Laffan, QatarFar East
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