The rally in LNG prices shows no signs of slowing as a cold snap is forcing Asian utilities to pay prices never seen before. Last week, Exxon sold a spot cargo for the 2nd half of Jan to Kyushu Electric Power Co. for the mid-$30/MMbtu level. This comes with many other spot deals done in the mid $20s. The higher spot prices are dragging the forwards higher. The JKM Feb contract closed near $20/MMBtu.
The maps below show why LNG prices are spiking. From the first third of January 2021, Western Europe and East Asia (China, the Korean Peninsula and Japan) has seen a blast of cooler temps. Utilities in the region are scrambling to find new LNG supplies with short timeframe deliveries.
Today’s Fundamentals
Daily US natural gas production is estimated to be 89.9 Bcf/d this morning. Today’s estimated production is +0.41 Bcf/d to yesterday, and -0.92 Bcf/d to the 7D average.
Natural gas consumption is modelled to be 100.1 Bcf today, -5.31 Bcf/d to yesterday, and -7.37 Bcf/d to the 7D average. US power burns are expected to be 28.94 Bcf today, and US ResComm usage is expected to be 40.1 Bcf.
Net LNG deliveries are expected to be 10.7 Bcf today.
Mexican exports are expected to be 6 Bcf today, and net Canadian imports are expected to be 5.8 Bcf today.
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