LNG prices hit 2016 high

SINGAPORE: Asian spot prices for liquefied natural gas (LNG) this week rose to their highest for 2016 so far, lifted by OPEC´s announcement it would cut crude oil production in cooperation with Russia and by a tightening regional gas market.

Spot prices for Asian LNG rose 30 cents from last week to around $7.40 per million British thermal units (mmBtu), trading sources said.

The main price driver was an agreement reached by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil production giant Russia to cut crude output in order to rein in global oversupply that has dogged markets for more than two years.

The announcement led to a more than 10 percent rise in oil prices to above $53 per barrel. With 80 percent of Asian LNG supply contracts linked to the price of crude, and oil playing a key role in shipping costs, the spot LNG market was also affected, traders said, pushing prices to their highest since November 2015.