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Asian area LNG little bit altered on sufficient stocks, moderate weather condition

Asian spot melted gas (LNG) rates were little bit changed today, as adequate inventories and mild weather capped demand from East Asian purchasers.

The average LNG cost for March shipment into north-east Asia << LNG-AS > increased somewhat to $14.00 per million British thermal systems (mmBtu), industry sources approximated.

Need in Asia stays warm, with East Asia demand relatively constrained in the middle of warmer-than-usual weather, stated Pang Lu Ming, Rystad Energy senior expert, adding that regional projections indicated that South Korea and Japan would see above-normal temperature levels through to early and mid-February.

While southern China will likewise experience warmer-than-normal temperatures in coming days, cooler temperatures will be seen in parts of the north, said Pang.

East Asian inventories remain ample.

Activity from Japanese players remains subdued, implying enough winter stocks for existing projections, Pang added, stating South Korean and Chinese players also continued to report enough inventories for winter.

In Europe, S&P Global Commodity Insights evaluated its daily North West Europe LNG Marker (NWM) cost criteria for cargoes provided in March on an ex-ship (DES) basis at $14.589/ mmBtu on Jan. 23, a $0.37/ mmBtu discount to the March gas rate at the Dutch TTF hub.

Argus evaluated the cost at $14.61/ mmBtu, while Glow Products examined the February rate at $14.594/ mmBtu.

Natasha Fielding, head of European gas, LNG and biomass pricing at Argus, kept in mind European delivered LNG prices had increased their premium over northeast Asian markets, pointing to storm disturbance to U.S. loadings and higher summer season restocking demands following a German proposal to subsidise summertime injections.

Freeport LNG also closed its export plant in Texas on Tuesday due to a power feed issue throughout a winter storm.

The European premium has even more incentivised companies to ship uncommitted LNG freights in the Atlantic basin to Europe rather of Asia, and might start to pull Middle Eastern supply away from Asia too, Fielding added.

LNG freight rates was up to tape lows, with Atlantic rates dropping for a 3rd straight week to $9,000/ day on Friday driven by an influx of recently constructed vessels and the directing of U.S. spot cargoes to Europe, said Glow Commodities analyst Qasim Afghan.

Pacific rates was up to $15,500/ day.

The U.S. arbitrage to northeast Asia through the Cape of Good Expect February expanded, once again indicating that U.S. cargoes have a reward to provide to Europe, Afghan included. He also kept in mind that the Qatar front month arbitrage to Northeast Asia had liquidated for the very first time in nearly 2 years, also incentivising deliveries to Europe over Asia.

(source: Reuters)