Expectations of higher LNG supply are set to cap the Italian PSV prompt and near-curve premium to the Dutch TTF going forward.
Shippers are already factoring additional supply into the PSV April 2021 premium to TTF, which fell by more than 30 percent between 1-26 February, ICIS assessments showed.
Higher LNG output could result in lower imports form northwest Europe via the Transitgas Pipeline, which traditionally represents the marginal source of supply for Italy.
Expectations of strong LNG supply in the second quarter were mainly due to Asian prices reducing their premium over Europe.
Because of this, Europe could offer better netbacks than the Asian market for some shippers, especially when shipping costs and times are factored in.
European imports over the next two months could also rise as a result of the recovery of US LNG exports, after supply issues in Texas during mid-February were resolved.
The Italian OLT terminal’s annual unloading schedule showed that market participants have booked all the available slots until July. Half of the terminal’s slots in August and September have also been booked.
Data from the Adriatic terminal also showed that slots available at the site were fully booked up to September. Port and algorithmic data from LNG Edge showed that four laden vessels are expected to dock at the terminal by 6 March.
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