The prices of liquefied natural gas (LNG) in the world are climbing rapidly. This is evidenced by three deals made in recent days by one of the world's largest traders, Vitol.
Bloomberg reports that the deals were made with PetroChina, Gunvor and Trafigura. The prices at which Vitol bought the goods between Friday last week and Tuesday this week ranged from $ 6.62 per million BTU for the first shipment to $ 6.87 per million BTU for the third.
Following these trades, the Japan- Korea Marker surged 20% to $ 6.761 per million BTU, an annual high.
Why LNG started to rise in price
LNG prices have received much-needed support recently, mainly due to weather forecasts. Forecasters expect cold winters in the northern hemisphere, especially in Asia. If the forecasts come true, they will provide a vital boost to the LPG trade. Producers and exporters are grappling with market redundancy that began well before the pandemic.
An oversupply of LNG around the world has led to lower benchmark prices for the commodity following the outbreak of the coronavirus. Then they fell even lower. Earlier this year, the price of LNG dropped to $ 2 per million BTU, making most of the export unprofitable. At the same time, demand dropped, leading to the cancellation of supplies, especially from the US
By late summer and early fall, LPG prices began to rise. Earlier this month, Reuters reported that the average price per million BTU shipped to Northeast Asia was $ 5.50. And futures contracts for December were at a premium of $ 0.20 in November.
Refinitiv analysts expect global LNG demand to rise by 4 billion cubic meters this winter. And primarily due to increased consumption in China, Japan and South Asia. : ///
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