Apr 21 2022
The discount of Northwest Europe delivered LNG to the Europe's Dutch TTF natural gas hub grew to its widest level in six weeks April 21.
Traders cited weak demand and limited slot availability at regasification facilities. Volatility was expected to continue amid the uncertain supply picture that has been exacerbated by Russia's invasion of Ukraine.
"Demand destruction everywhere at the current prices and mild weather," one Atlantic Basin trader said.
A second trader said neither the Atlantic Basin nor Asia had much of a buying appetite at the moment.
"So, for this reason the high discounts and the problem with the slots," the second trader said. "In the Atlantic, there is a huge discount in PEG or PVB versus TTF, so in order to sell there you need a huge discount."
PEG is a French gas hub, while PVB is a Spanish gas hub.
S&P Global Commodity Insights' Platts DES Northwest Europe for June was assessed at $26.879/MMBtu April 21, while the June TTF contract was assessed at $32.067/MMBtu. Northwest Europe's $5.188/MMBtu discount to TTF was the widest reported since March 10.
The delivered price of LNG into the Mediterranean was assessed at a 30 cent/MMBtu discount to NWE April 21 based on market information.
Despite having fallen from record highs in early March, delivered LNG prices to Europe remain sharply higher than a year ago. Market participants have worried about the impact persistently high prices would have on end-user demand for LNG.
Meanwhile, for several months, market participants have reported limited regasification slots available in Europe for prompt delivery. That issue was heightened by the significant LNG volumes that headed toward Europe after the war in Ukraine started Feb. 24 amid fears of pipeline gas disruptions.
Across the Atlantic, the Platts Gulf Coast Marker for US FOB cargoes loading 30 to 60 days forward was assessed at $25.630/MMBtu April 21, up $1.48 on the day.