Asian LNG Prices May Decline If Peace Talks Progress - Rystad Energy

KUALA LUMPUR, July 31 (Bernama) -- Asian liquefied natural gas (LNG) prices are expected to decline further for the remainder of the year if peace talks between the United States (US) and Iran progress, according to Rystad Energy. 

Its vice-president of gas and LNG research, Masanori Odaka noted the recent softening in Asian LNG prices, with the front-month daily price for September falling 5.0 per cent week-on-week to US$20.5 per million British thermal units (MMBtu), while the more liquid derivatives price for October dropped 2.8 per cent week-on-week to US$20.3 per MMBtu.

“Markets are pricing in peace, easing tensions between the US, Israel, and Iran are pulling gas prices down, though tight Gulf LNG supply is keeping a lid on how low they go.

“A Trump-Netanyahu meeting, a pause in US-Iran strikes and renewed diplomatic engagement have lifted hopes that ceasefire talks could resume, all adding to sentiment in the market at current,” he said in a statement today. 

He said Oman is also pushing a Gulf-backed plan to restore normal shipping through the Strait of Hormuz, though management of the waterway remains contested.

“The lower geopolitical risk premium has pulled European and Asian gas prices down, but tight West Asia LNG supply is keeping the decline in check.

“Some traders believe the market is fundamentally tight in Asia as long as volume from the Middle East remains subdued,” he said.

At the time of writing, Brent crude was down 0.93 per cent to US$88.20 per barrel.

-- BERNAMA