US LNG drops to lowest price since Middle East war began

US LNG prices fell to their lowest levels since the Feb. 28 start of the US-Israel war with Iran, tracking softer delivered prices in Europe and Asia as buyers take a more cautious approach to spot purchases.

The Platts Gulf Coast Marker for US FOB cargoes loading 30-60 days forward was assessed at $12.76/MMBtu on April 15, down 56 cents/MMBtu, or 4.2%, day on day. This marked the lowest assessed level since Feb. 27, when the GCM was assessed at $9.25/MMBtu, prior to the start of the conflict.

Throughout the trading day, market sources reported lower day-on-day tradeable values, with an offer for US LNG cargoes loading in June below Platts GCM assessment. An Atlantic Basin trader said the offer level appeared to reflect a seller seeking to attract buying interest.

US LNG prices have followed declines in delivered prices across key demand centers as market participants digest signs that Tehran and Washington may resume diplomatic negotiations.

Platts assessed the JKM, the benchmark price for LNG delivered to Northeast Asia, for May at $15.883/MMBtu, down $1.22/MMBtu day on day. Further along the curve, Platts assessed the JKM June derivative at $15.9/MMBtu, JKM June/July contango at 12.5 cents/MMBtu, while July/August derivatives were assessed at a 12.5-cent/MMBtu backwardation.

Asian demand remained subdued, with elevated prices continuing to weigh on buying interest as traders assessed the extent of potential demand destruction, a Singapore-based trader said.

In Europe, Platts assessed its DES Northwest Europe May marker at $13.910/MMBtu on April 15, down 49.7 cents/MMBtu day on day, and at a 37.5 cent/MMBtu discount to the May TTF hub futures price. Both the Platts DES Northeast Asia and DES Northwest Europe assessments marked their lowest levels since the outbreak of the Middle East conflict.

Delivered LNG prices into Northwest Europe for May through June currently fail to cover regasification costs at some terminals relative to pipeline gas purchases, leading some market participants to view spot LNG imports as uneconomic. In addition, a backwardated forward curve continues to limit incentives for gas storage injections, as previously reported.

European gas storage stood at 29.55% full as of April 14, according to Aggregated Gas Storage Inventory data, a low for this time of year. Market participants have previously told Platts they expect injections to remain delayed until LNG-TTF spreads support economically viable regasification into storage.

Golden Pass LNG exports higher

In the US, feedgas deliveries to LNG facilities along the Gulf Coast were estimated at 20.4 Bcf/d on April 15, up slightly from 20.3 Bcf/d the previous day, S&P Global Energy CERA data showed, though the figures are based on morning nominations and may be revised.

US LNG terminals had previously maximized exports amid higher spot prices, with liquefaction rates and LNG loadings reaching record highs in March, leaving operators to assess how long maintenance schedules may continue to be deferred.

Feedgas flows to the Golden Pass LNG facility in South Texas rebounded to 355.3 MMcf/d on April 15 after two consecutive days below 150 MMcf/d. Since April 1, the terminal has received more than 4 Bcf of natural gas, including volumes used to fuel the facility, CERA data showed. The feedgas in storage supports the developer's stated plan to load its first LNG cargo in April.

The ExxonMobil chartered HL Sea Eagle is scheduled to arrive at the US Gulf Coast around April 22, according to S&P Global Commodities at Sea data. The vessel was underway in the Straits of Florida near Cuba on April 15.

Meanwhile, the QatarEnergy chartered Wadi Al Sail is also headed toward the US Gulf Coast, with an estimated arrival on April 19 after last being recorded at Port Elizabeth, South Africa, CAS data showed.