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ICIS: Asian LNG spot prices drop for March delivery

LNG Industry,

The price of Asian spot LNG for March delivery has fallen below the February 2015 assessment, as buyers anticipated sharply lower rates under their oil-indexed contracts in March and April.

The ICIS February East Asia Index (EAX) contract closed at US$9.537/million MBtu on 15 January, a US$0.750/million MBtu fall since becoming the front-month contract on 16 December 2014. The fall was outpaced by the March 2015 contract, which dropped US$1.169/million MBtu over the same period to US$9.331/million MBtu.

Despite the weakness of Asian spot prices, the premium of Asian LNG prices to those in Europe widened slightly over the period, as northwest European hub prices softened in response to the falling crude oil price.

February opened as the front month on 16 December amid moderate demand in East Asia. South Korea's KOGAS was understood to be finalising supply discussions with Qatar's RasGas which would take it out of the February market. Additionally, outstanding February demand in Japan was limited to a few cargoes.

Pricing discussions focused on the effect of falling crude oil prices and the extent to which they had fed into the JCC (Japan custom-cleared) crude oil benchmark, the monthly average price of crude imported into Japan.

The full analysis can be accessed on the ICIS website.

Adapted from ICIS press release by Katie Woodward

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