NYC-based PIRA Energy Group reports that the Atlantic basin spot loses foothold in Asia, where supplies begin to soar.
Beyond this winter, the outlook for Atlantic Basin suppliers looking to place volumes into Asia is increasingly dim on two fronts: on the supply front, incremental volumes are pouring in regionally from PNG, with both trains fully ramped up, as well as from Australia with the commissioning of QCLNG to be followed up by 3 other new projects sometime in 2H, and then another three trains between Malaysia and Indonesia, most likely in the fourth quarter. These volumes are mostly contracted to Asian buyers, with some volumes up for grabs beyond what volumes portfolio buyers have captured.
In the U.S. last week’s storage number came in above consensus estimates calling for a storage withdrawal in the mid-220s. The collective miss amounted to some 10 BCF, pointing to 1.4 BCF/D tighter fundamentals than anticipated. Consequently, PIRA marked the report with a bull icon despite the market’s multi-directional price action.
PIRA sees the amount of downside price risk in Europe losing steam for the time being. Supply cuts continue to emerge to enough of an extent that Germany is withdrawing gas at higher than expected rates from storage in January. Gas units are set to run harder during the summer, as clean spark spreads have converged versus clean dark spreads.
Press Release; Image: Oil Search