Reuters: Global gas price convergence shows shift to oversupply
The gap between natural gas prices globally has shrunk to its narrowest since 2010, as faltering demand in Asia combined with rising supply across the board aligns benchmarks pulled apart by the US shale boom and Japan's Fukushima nuclear disaster.
The convergence between prices in Asia, the Americas and Europe could mark the end of a period of tightness in gas markets as new liquefied natural gas (LNG) export projects in Australia and the United States start up from next year.
A mild winter and summer this year preserved stockpiles, further capping demand for LNG imports. Prices for LNG cargoes are trading within a $2 per million British thermal unit (mmBtu) range globally, the tightest spread since early 2010, said Marcel Boonaert, the head of trading and portfolio at Wingas UK. At its peak, LNG in Asia was trading at $12/mmBtu above gas at the European benchmark, and around $5-$8/mmBtu for South America.