KUALA LUMPUR (Dec 31): A wide first quarter-fourth quarter spread in 2022 northeast Asian delivered LNG prices in recent months, against a comparatively flat oil-linked price curve, has offered a strong incentive for long-term LNG buyers to bring forward supply from the start of next winter to the start of 2022. The premium for spot LNG prices over corresponding oil-linked prices further along the curve was considerably less — US$14.42/mn Btu for the second quarter, and US$14.64/mn Btu and US$15.77/mn Btu for the third and fourth quarters, respectively. It said term contracts generally include some volume flexibility, typically equivalent to around 10% of the annual contractual quantity. Similarly, it said producers facing stronger supply obligations under term contracts may have limited spare capacity to produce additional cargoes for the spot market, reducing overall spot activity. However, Argus said stronger contractual receipts over the first quarter of 2022 would leave buyers more reliant on spot supplies over the remainder of the year, and producers with more spot cargoes to offer.

Source: The Edge Markets December 31, 2021 11:05 UTC