DES Northwest Europe LNG price, US FOB Gulf Coast Marker reach new highs

The delivered price of LNG into Northwest Europe and the value of US FOB Gulf Coast cargoes loading 30 to 60 days forward hit new record highs March 4, with traders seeing no limit to the extreme market volatility that has been seen since Russia invaded Ukraine.

Platts DES Northwest Europe was assessed at $60.117/MMBtu, up $15.921/MMBtu on the day and above the previous record of $58.638/MMBtu on Dec. 21, 2021. Platts Gulf Coast Marker was assessed at $58.250/MMBtu, up $16.350/MMBtu on the day and above the previous record of $54.95/MMBtu that was also registered on Dec. 21.

"Honestly, it's mental," said an Atlantic-based broker. "Physical credit is shot to bits after the winter."

Market participants said they were hearing very thin to almost no trading at all on physical in the Atlantic. Some were trying swaps rather than outright positions, traders said.

Cargo diversions due to Russian sanctions were said to be impactful, and the situation could worsen if the military conflict continued for a protracted period.

Two Cyprus-flagged LNG tankers that were bound for the UK's Isle of Grain terminal changed course amid discontent among port workers over their Russian cargoes, a trade union representative said March 4. Elsewhere, Lithuania halted imports of Russian LNG at its Klaipeda terminal, a spokesperson for the Lithuanian energy ministry said March 4.

Such diversions were "likely to happen" more, said an Atlantic-based trader.

With the ultra-high price levels amid the strong supply push to Europe, dynamics were also shifting for the Mediterranean.

S&P Global Commodity Insights assessed NWE at a 5 cents/MMBtu premium to the Platts Mediterranean Marker, based on market intelligence.

Spanish PVB April offers were heard March 2 at discount levels to the TTF that would suggest Northwest Europe would become more attractive for delivered LNG cargoes. Then, on March 3, gas grid operator Enagas said Spanish LNG import volume were set to decline in April following robust volume in February and record nominations for March.

"We see PVB at minus 2.50Eur/MWh to TTF, which is about 75 cents just at the hub," said a second Atlantic-based trader. "Also, Spain has limited connectivity to mainland Europe."