Med LNG outright prices hit monthly high to US Henry Hub gas price

LNG prices in the Mediterranean have climbed to a monthly high, pushing their differential to US Henry Hub gas prices to the highest levels since the beginning of February and theoretically improving the region's attractiveness for US LNG cargoes.

Platts, a part of S&P Global Commodity Insights, assessed the East Mediterranean LNG price at $8.555/MMBtu on March 5, or a 20 cents/MMBtu premium to the Northwest European market. At the same time, the Mediterranean marker for April was assessed at $8.305/mt, or a 5 cents/MMBtu discount to NWE.

In outright price terms, both the West and East Mediterranean LNG prices were at the highest levels seen since Feb. 2, amid shipping disruptions in the Red Sea.

At the same time, the East and West Med were assessed at a $6.635/MMBtu and $6.385/MMBtu premium to Henry Hub, respectively, marking the highest levels seen since Feb. 2.

"I heard the lack of wind across Europe was pushing up gas to power [demand] but there are so many cargoes available," an LNG trader said. "I don't see any reason for prices to stay at [this] level... There is no floor other than American gas [prices] but things could drop much more."

LNG prices in the Mediterranean have been experiencing high levels of volatility recently, with the East Mediterranean price also hitting its lowest level recorded against Henry Hub prices on Feb. 22, when bearish sentiment in the European market contrasted sharply with a sudden rise in US gas prices.

However, prices in the Mediterranean have subsequently picked up, due in part to the disruption in deliveries along the Suez Canal.

Imports of LNG in February into the East Mediterranean -- including Turkey, Greece and Croatia -- stood at 1.85 million mt, up from the 1.77 million mt seen in January, according to data from S&P Global Commodity Insights analysts.

The US accounted for around 59% of the February imports, up from supplying around 55% in January.

Higher premiums vs Henry Hub have helped to attract additional volumes since the record low levels seen on Feb. 22.