The price of LNG (liquefied natural gas) in Rotterdam, one of the key energy supply centers in Europe, has reached $1776 per ton, marking an increase for the fourth consecutive week. This increase of $121 per ton compared to last week reflects supply instability in Norway's gas fields and forecasts of lower temperatures in Europe.
Fluctuations in Natural Gas Prices in Europe
The Dutch TTF natural gas contract, recognized as the reference price for gas in Europe, has also increased by $2.38 per MMBtu ($124 per ton), reaching $31.87 per MMBtu ($1657 per ton). This upward trend is driven by supply disruptions in the Troll and Asgard gas fields in Norway, forecasts of lower temperatures in Europe, and geopolitical tensions in the Middle East.
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Analysts from ING Bank emphasized that gas prices in Europe are heavily influenced by developments in the Persian Gulf, and LNG flows are likely to be significantly reduced for much of the Northern Hemisphere winter. According to Greg Molnar, a gas analyst at the International Energy Agency (IEA), several factors, including cold weather, low reserves, and unexpected disruptions in Norway, have exerted upward pressure on prices. However, the most significant factor remains geopolitical issues and the risk of military tensions in the Middle East.
Status of Gas Reserves in the European Union
According to available reports, underground gas reserves in the European Union reached 74.6% on October 23, an increase from 74.3% the previous week, but a decrease of 10.6% compared to last year. Increasing tensions in the Middle East and very low gas reserves have significantly raised prices for the coming months and projections for 2027.
In Singapore, the price of LNG has also increased by $96 per ton to $1865 per ton, which is a smaller increase compared to Rotterdam. This increase has reduced the Singapore premium over the ARA region to $89 per ton. The price of LNG in Singapore typically aligns with the NYMEX Japan/Korea Marker (JKM), which has risen to $31.42 per MMBtu ($1634 per ton).
Threats related to Middle Eastern tensions and forecasts of lower temperatures in winter have also heightened concerns about gas supply in Asia. Consequently, LNG prices in Asia have approached the highest levels in four years. Experts from ANZ Bank also noted that concerns over escalating tensions in the Middle East have contributed to rising prices in Asia and led to intense competition for LNG supply between Asia and Europe.
Additionally, the Finnish shipping company Wasaline has entered into a contract to receive 42 GWh of liquefied biomethane (LBM) annually under an agreement that will commence deliveries in January 2028. LBM sales in Rotterdam in the third quarter have surged to over three times compared to the previous quarter, reaching 11,000 tons, the highest level since reporting began in 2021.
Finally, the South Korean shipping company HMM has also ordered eight container ships with a capacity of 13,000 TEU from HD Hyundai Heavy Industries and HD Hyundai Samho, valued at approximately 2 trillion KRW ($1.5 billion).
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