--DES Northeast Asia

　 In western Japan, the rainy season has ended, and daytime highs in Osaka and Fukuoka have exceeded 30 degrees. Temperatures in eastern Japan are also forecast to rise to the low 30s this weekend. A major power company in western Japan is wary of a sudden surge in demand, noting that "the extent of the upward deviation in electricity and gas demand will depend on just how hot it gets." However, since the Japan Meteorological Agency had issued a long-term forecast early on predicting higher-than-average temperatures this summer, and given the ongoing decline in LNG supplies from the Middle East, the company had already adjusted its summer supply-and-demand program in advance and says there is no need to move to secure additional supplies on the spot market at this time. A major gas company in western Japan is also focusing on taking delivery of its term contract cargoes and has shown no interest in spot procurement, given the navigation risks in the Strait of Hormuz.

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

　 India's state-owned gas company GAIL again issued a buy tender that closed on Thursday. GAIL floated a buy tender for the third straight day. The company sought one cargo for Jul 11-20 delivery. "The tender closed on Wednesday may not be awarded, so the company is believed to have reissued the tender," said a Japanese analyst. One cargo for Jul 10-22 delivery to the 22.50 mil mt/year Dahej terminal was subject to the tender closed on Tuesday. In the tender closed on Wednesday, the company sought one cargo for Jul 10-31 arrival to the Dahej terminal. Meanwhile, Pakistan's state-owned Pakistan LNG (PLL) was in the middle of conducting a buy tender closing on Friday for super prompt arrival. PLL was seeking one cargo for Jul 15-16 delivery.

--FOB Atlantic, DES Europe and South America

　 Some observers suggest that the increase in demand for air conditioning due to the heat wave will be limited in Europe. This is due to the fact that many regions have low humidity and air conditioners are not widely used. On a floating basis, bids for August delivery were posted at discounts of 21-23cts to the Dutch Title Transfer Facility (TTF) natural gas quotations for August, with the lowest offer countered at a discount of 19cts to the quotations.