--DES Northeast Asia

In the DES Northeast Asia market last week, front month delivery prices moved around $13.50-13.80. In response to the surge in the Netherlands' TTF market caused by supply worries about Russian natural gas as well as the tension in the Middle East, prompt delivery hit its highest since Dec 12 last year.

In contrast to the surge led by TTF market, most end-users in Northeast Asia seemed to have secured enough supply to meet their demand for September delivery. Moreover, national holidays were scheduled in Singapore on Aug 9, followed by those in Japan and South Korea this week. As many players in western companies were also taking on leaves for summer vacation, spot discussions were subdued, overall. In Japan, heat waves contributed to growing gas demand for power generation but city gas sales for industrial use apparently became lackluster. A city gas company in western Japan reckoned that gas demand for semi-conductors was especially weak.

Amid this, Kansai Electric Power Co (KEPCO) on Aug 8 closed a sell tender for October delivery to Northeast Asia. As reported, the company had sold an Oct 12-14 delivery cargo at a discount level to the October contract of DES Northeast Asia spot quotations via its tender closed on Aug 1. An Asian trader said, "Since the market shows the contango, major energy utilities make a profit margin by spot transactions that they purchase prompt delivery in advance and sell forward delivery thereafter."

--FOB Middle East, DES South Asia and the Middle East

Concerns over retaliation by Iran against Israel have been mounting. Regarding the impact on demand from the Middle East countries, a Japanese company said, "There are basically no impacts. Israel keeps on exporting natural gas to Egypt, and this situation does not change."

--FOB Atlantic, DES Europe and South America

Ukrainian forces on Aug 7 reportedly attacked Sudzha in Russian territory, where a pipeline hub to supply Russian gas to Europe is located. Ukrainian forces might have occupied the gas facility there. As of now, Russian natural gas has continued to flow into Europe; however, "Supply worries have emerged, along with the risk of intensified battle as a result of penetration by Ukraine into Russia" (a Japanese company) was heard. On the other hand, "Supply of Russian gas through Ukraine transit will end sooner or later because the contract expires at the end of this year. Supply worries may be overestimated" was heard from another Japanese company.