--DES Northeast Asia

In the DES Northeast Asia market last week, the December contract, which came to front position, hovered at around $13.30. While the geopolitical risk in the Middle East still continued, a loose supply/demand balance weighed on prices.

The supply/demand balance in the Northeast Asia market appeared to be slack. A Chinese end-user said, "Although some Japanese players were interested in buying, there were more cargoes to sell". From Oct 16 to 17, PetroChina and British BP offered early December delivery at an around 10cts discount to flat to the December contract of DES Northeast Asia spot quotations.

For delivery to South Korea, end-users overall have proceeded with inventory building, finishing spot procurement within this year. Some market participants, however, pointed out that KOGAS might show an interest in procuring December delivery. "South Korea usually increases outputs from gas-fired power plants instead of coal-fired power plants during winter; therefore, they intend to build inventory of LNG before the off-demand season, which usually offers cheap prices, ends," said a Japanese end-user.

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

End-users in India continued to purchase cargoes in the spot market amid healthy demand in the country. Indian state-run GAIL floated a buy tender. Through the tender, GAIL planned to buy a cargo for Nov 25-30 delivery to the 22.5 mil mt/year Dahej terminal. The tender was closed on Oct 16.

--FOB Atlantic, DES Europe and South America

In the U.S, the 5.25 mil mt/year Cove Point project, located in Maryland, has returned to operation from its regular maintenance, which has started since late September. The data by the US Energy Information Administration (EIA) indicated feedgas supply to LNG projects in the country from Oct 3 to 9 was 12.7 billion cubic feet per day, the same level as a year earlier. With the return of the Cove Point project, the number would increase further.