Higher European gas prices pull LNG shipments from Asia

Traders are cashing in on higher gas prices in Europe against Asia, diverting at least two liquefied natural gas tankers that were initially eastbound towards Europe and Turkey in the past week, shiptracking data showed.

Falling temperatures in the northern hemisphere are boosting heating demand, lifting prices in both Asia and Europe and increasing regional competition for LNG supply.

Asian LNG futures based on the benchmark SP Global Energy Platts Japan-Korea Marker (JKM) price was at $11.22 per million British thermal units (mmBtu) on Thursday.

Meanwhile, the benchmark front-month contract at the Dutch Title Transfer Facility hub closed at €38.22 per megawatt hour on Thursday, or $13.17 per mmBtu, boosted in recent days by cold weather and low storage levels.

"Europe's pull of LNG cargoes remains strong, given a recent cold snap, accelerating gas storage withdrawals," said Ashley Sherman, senior analyst at Vortexa.

However, he added that Northeast Asia's colder weather below seasonal norms is expected over the rest of January, which should keep regional demand and competition for flexible cargoes firm.