As the global gas market has tightened this year, a similar dynamic has played out with the premium of JKM prices over TTF for delivery this winter. The increasing spread reflects:
- Higher freight rates, as increased interbasin flows tightens the shipping market
- Increased risk premium for Panama canal delays, similar to the issues seen across winter 2020
- Firm Asian demand pricing in additional supply that may be required to balance the relatively inflexible NE Asian market over peak winter.
We will investigate these dynamics in more detail on Monday’s blog.