5 mins read

Market Analysis

Crude Oil

• Brent started recovering from mid-week & recovered 4.43% from Tuesday price of $48.73/bbl.
• Brent uptick is primarily due EIA inventory numbers which depicted 5.2 million barrel of commercial inventory decrease and 0.2 million barrels of gasoline.
• The US inventory draw dawn needs to be monitored closely as last week crude prices were down primarily on technical.
• AS per BHI, US rig count increase by 8 and now stand at 885.
• Market expecting OPEC to maintain the oil cut for next six months as this perhaps is the only news, which can sustain oil prices.

Natural Gas

• Natural gas prices surge by 8.01% this week primarily lower than expected built up of inventories. AS per EIA, working gas inventories is 2,301 BCF on May 5, lower increase than expected increase of 53 BCF.
• Recent uptick is primarily due to positive sentiments in the market as US and China agreed to bolster trade.
• Natural gas wholesale prices at European hubs witnessed sharp decrease with more than 4% plunge at NBP, TTF, GPL & TRS.
• Mild weather has been a major reason for downward price movement in Europe.
• According to experts, TTF is transforming into more acceptable marker in Europe.

Currency

• US dollar face pressure on disappointing news on American inflation and retail sales. Right now trading at 1.0909 against Euro, down by 0.44%.
• Euro depicted strength due to stronger German growth news from 0.4% to 0.6% expansion.
• GBP took a hit on Thursday due to BOE decision of keeping Interest rate unchanged and downward revision of estimated growth from 2.0% to 1.9%. Trading currently at 1.2882 from 1.2939 at the start of the week.

Weather

• Spring season in full swing in Europe, North & South America.
• Middle East and Asia is facing hot temperature.
• Europe temperature remained mild from 15^o-20^o
• Middle East in low 30^o C, whereas Indian Subcontinent is facing hot temperature of around 35^o
• North East and South East Asia regions are also entering into summer with mercury ranging between 25^o – 30^o
• South America is also witnessing moderate temperature.  
• Weather outlook is same for coming week, which means additional requirement from Asian markets and subdued interest from Europe.

LNG

• LNG prices moved south in the markets of Japan, Korea and Taiwan, primarily due to lower demand from Europe and supply abundance. Friday LNG prices were heard at mid $5/MMBTU level.
• Prices in India also down throughout the week as India is taking advantage of supply glut.
• Storage tanks are full in India and with monsoon approaching, Dabhol terminal will not be accessible for vessels.
• Prices in Europe witnessed decrease by 1%, primarily due to mild weather and lower wholesale prices.
• On the supply side Angola has put one cargo on tender for Mid-May loading, while Nigeria has supply available and closed a tender for May delivery.
• Indonesia Bontang plant also issued a tender for June and July loading.
• US and China agreement on trade created excitement in the LNG sector, however US Henry Hub prices are still not workable for Chinese markets.
• Cheniere Energy already in discussion with Chinese State owned companies for supply of LNG in long term basis. So far Cheniere has sold nine cargoes on spot basis to China.
• Number of gas discoveries has compelled Egypt to reduce it dependence on imported LNG, with deferring cargoes in 2017 and aim to cut it further to 30 cargoes in 2018.
• Sinopec has finished building its third LNG terminal, located in the northern Chinese port city of Tianjin. The terminal has the capacity to manage 3 MTPA (400 MMSCFD).
• Lebanon plans to moor three FSRUs along its coastline.
• Petronas is focusing on South East region of Pakistan, India and Bangladesh for supply of LNG.
• Thailand’s PTT plans to expand its LNG import facility by setting up another LNG import terminal with 7.5 MTPA capacity.
• Overall demand in Asia expect to pickup in coming weeks due to summer demand.

 

LNG Merchant Activity

• This week 52 vessels carrying 3.5 million tons (178.40 BCF) loaded from various ports across the globe.
• Six vessels carrying 20.74 BCF departed from Nigerian port for European and Asian destinations.
• One vessel left from Equatorial Guinea carrying 2.99 BCF.
• Pont Fortin, Trinidad & Tobago loaded two vessels with 5.65 BCF.
• 3 vessels loaded this week from Sabine Pass, USA.
• Two vessels departed from Russia carrying 6.07 BCF.
• 12 vessels left from Australian export terminals at Darwin, Dampier and Gladstone ports for Japan, China and Singapore carrying 39.14 BCF.
• Middle Eastern terminals at Das Island (UAE), Qalhat (Oman) and Ras Lafan (Qatar) loaded 21 vessels carrying 73.73 BCF for Asian destinations.
• 18 BCF loaded onto 3 vessels from Indonesia.