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Last week, Atlantic rates rose for the first time in six weeks.
“Spark30S Atlantic rates dropped by $2,000 to $57,750 per day, canceling out the rate increase seen last week and further delaying the expected winter rally,” Qasim Afghan, Spark’s commercial analyst, told LNG Prime on Friday.
He said Spark25S Pacific rates continued to decline for a seventh week, falling by $9,000 to $64,000 per day.
“This is the largest week-on-week decrease in Pacific rates since January,” Afghan said.
European prices climb
In Europe, the SparkNWE DES LNG front month rose this week.
“The SparkNWE DES LNG front month price for October delivery increased by $1.575 this week, pricing in at $12.225/MMBtu,” Afghan said.
“This has mostly offset the three weeks of price decreases seen throughout this month, where prices had dropped by $2.1/MMBtu since the start of the month to the monthly low of $10.65/MMBtu seen last week,” Afghan said.
He added that the discount to the TTF widened by $0.035 this week to $0.175/MMBtu.
Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU continued to rise and were 93.98 percent full on September 25.
Gas storages were 93.45 percent full on September 18, and 94.95 percent full on September 25, 2023.
JKM
In Asia, JKM, the price for LNG cargoes delivered to Northeast Asia in November settled at $13.190/MMBtu on Thursday.
Last week, JKM for November settled at 12.970/MMBtu on Friday, September 20.
Front-month JKM then rose to 13.205/MMBtu on Monday. It dropped to 13.055/MMBtu on Tuesday and rose again to 13.095/MMBtu on Wednesday.
State-run Japan Organization for Metals and Energy Security (JOGMEC) said in a report earlier this week that JKM for last week (September 16 – 20) fell to high-$12s on September 20 from mid-$13s the previous weekend.
JKM fell to the low-$13s in the first half of the last week amid “low market participation and limited trading, but rose to mid-$13s on the 19th due to breathing geopolitical tensions between Russia and Ukraine following a drone attack in Tver, Russia, on the 18th,” it said.
JOGMEC said JKM then “turned around and fell to high-$12s following a significant drop in European gas prices.”
JKM options traded volumes hit record
JKM LNG options trading volumes have reached record highs this year, driven by the influx of new market entrants and the increasing sophistication of risk management techniques, according to a report by Platts, part of S&P Global Commodity Insights.
The development highlights the increased emphasis on optionality in physical contracts that form the underlying basis of hedging for most of these options trading, the report said.
Platts said a total of 23,460 lots were traded for JKM average price options in January-August 2024, more than the entire traded volume for 2023 at 14,660, according to data on the Intercontinental Exchange.
The majority of volumes traded were concluded via brokers.
In 2020, the contract saw a record volume of 44,205 lots being traded. However, in the January-August period, the traded volume stood at 18,155 lots in that year as well, the report said.
In 2024 year-to-date, the average for JKM was at $10.97/MMBtu. The highest and lowest values were $14.366/MMBtu and $7.981/MMBtu this year so far, according to data by Commodity Insights.