Doha: Asian spot LNG prices inched up last week as market players fear prices might skyrocket if the European Union imposes a ban on Russian oil and Moscow reacts by halting gas supplies to the continent.
The average LNG price for June delivery into north-east Asia was estimated at $23.90 per million British thermal units, up $0.40 from the previous week, industry sources said.
There is some buying interest from south Asian markets amid softer spot prices, while demand for spot cargoes is expected to remain muted in China as ongoing COVID-19 related lockdown measures have now been extended to the capital Beijing.
Meanwhile, The proposed EU ban on Russian oil is increasing market tensions about possible future gas supply disruptions either triggered by a Russian counter move, or an EU ban on natural gas later in the year. European gas prices have risen recently amid ongoing concerns over possible cuts to supply from Russia, which provides around 40 percent of the bloc’s gas.
However, a stable flow of LNG into Europe and restoring European gas storage have helped ease some concerns. European LNG imports hit a five-year monthly high in April, with France, Spain, and the UK topping the importers’ list.
Oil prices rose nearly 1.5 percent on Friday, posting a second straight weekly increase as impending European Union sanctions on Russian oil raised the prospect of tighter supply and had traders shrugging off worries about global economic growth. Brent futures rose $1.49, to settle at $112.39 per barrel. US West Texas Intermediate crude climbed $1.51, to end at $109.77 a barrel.
For the week, WTI gained about 5 percent, while Brent nearly 4 percent. The EU is tweaking its sanctions plan, hoping to win over reluctant states and secure the needed unanimous backing from the 27 member countries, three EU sources told Reuters. The initial proposal called for an end to EU imports of Russian crude and oil products by the end of this year.
Ignoring calls from Western nations to hike output more, the Organization of the Petroleum Exporting Countries, Russia and allied producers (Opec+), stuck with its plan to raise its June output target by 432,000 barrels per day.
However, analysts expect the group’s actual production rise to be much smaller due to capacity constraints.
Meanwhile, strict COVID-19 curbs in China are creating headwinds for the world’s second-largest economy and leading oil importer.
