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Platts JKM LNG cargoes for July rise 40 cents to $10.0/MMBtu on tight supply, short-covering

Highlights

The Platts JKM for LNG cargoes delivering in July ended the week at $10.0/MMBtu, up 40 cents/MMBtu from the previous Friday, with the market supported by supply tightness and demand from traders to cover short positions.

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Concerns over supply disruption helped particularly to underpin prompt prices, flattening the JKM curve toward the end of the week in a marked shift from the steep contango prevailing since April.

Offers for July cargoes largely remained above $10/MMBtu while bids were seen from the mid to high $9s/MMBtu throughout the week. On Friday, both H1 and H2 July were assessed at $10.00/MMBtu.

The market took a cue from the strong results in H2 July delivery tender from Russia's Sakhalin, which was heard awarded at above $9.90/MMBtu to an equity holder.



An H2 August cargo from the US was heard to have traded on a JKM-linked basis earlier in the week, with a small portion of the cargo fixed at just below $10/MMBtu DES North Asia.

In production news, some customers of Malaysia's Bintulu LNG said they had received a request for their delivery to be delayed.

S&P Global Platts trade flow software cFlow showed that a cargo on board the Puteri Delima Satu departed the facility on June 4, followed by another cargo aboard the Puteri Zamrud leaving on June 7.

In the US, Sabine Pass Train 3 was heard shut for maintenance since last week while Oman LNG shipments were reported to have been impacted by a cyclone that battered the country last week.

The supply constraints combined with remaining demand from traders needing to cover their short positions pushed up the price of prompt cargoes.

An Australian cargo for H2 June delivery was sold at around $10/MMBtu or higher by portfolio player Chevron, according to sources.

Meanwhile, steady requirements were seen from India. GAIL issued a buy tender for June 26 delivery, which is expected to close June 5. Bids were heard to be valid until the same day.

IOC also issued a tender seeking a cargo for August 9 delivery, following on the heels of another IOC tender for June 27 delivery, which was awarded at around the $10/MMBtu mark, according to two sources.

A cargo from Angola LNG was awarded for delivery to India to meet the IOC requirement, according to market sources. The tender was awarded last Friday, and offered one DES cargo with a loading window of between June 15 and July 15. The price was heard to be above the $9.7/MMBtu mark, though this could not be corroborated.

--Eriko Amaha, eriko.amaha@spglobal.com
--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com