Brazilian LNG prices rally, hit narrowest ever discount to TTF

LNG prices in Brazil rallied in line with strength seen across the Northwest European markets to reach a record high against the Dutch TTF gas price.

Platts, part of S&P Global Commodity Insights, assessed DES Brazil LNG for delivery 15-45 days forward at $8.895/MMBtu March 18, hitting parity to the Northwest European LNG marker.

The price was also a 24.5 cents/MMBtu discount to the TTF physical price, the narrowest the discount has been since the DES Brazil assessment was launched Feb. 1.

Prices in Brazil have been tracking those in Northwest Europe, traders said, as Brazilian buyers will look to attract volumes from the US this month.

Previously, despite the healthy hydro-reservoir levels in Brazil, a weaker wet season may lead to Brazilian imports of LNG jumping to record highs, sources said.

Traders had expected demand to spike in March and hit record highs. However, sentiment has cooled, and volumes this month are now expected to fall below those of February and continue the downward trend set in January, sources said.

Brazil is yet to import any LNG so far in March, according to data from S&P Global Commodity Insights. However, 60,000 mt is expected to land March 19 followed by a further 70,000 mt on March 20, with both cargoes from the US.

The recent strength in LNG prices has pushed the DES Brazil assessment to a $5.973/MMBtu discount to the Dated Brent price. This narrowed from the last peak of $7.938/MMBtu on Feb. 22, to put it at the narrowest discount seen since Feb. 7.