* European prices slump to record lows
* Up to 45 U.S. cargoes cancelled for July loading
* Chinese buyers seek cargoes
By Ekaterina Kravtsova
LONDON, May 22 (Reuters) - Asian spot prices for liquefied natural gas (LNG) were dragged down this week by a sharp drop in European gas prices and global oversupply.
The average LNG price for July delivery into northeast Asia LNG-AS was estimated at between $1.85 and $2.00 per million British thermal units (mmBtu) on Friday, compared to the $2.40 per mmBtu assessment of June delivery last week.
“European gas prices are taking LNG prices lower across the globe,” an LNG trader said.
The front-month price on the Dutch market dropped by almost 30% in the past week, trading close to $1.00 per mmBtu on Friday. The day-ahead dropped below $1.00 per mmBtu.
“It’s a rolling oversupply that is getting worse and worse,” a gas trader in Europe said.
The low prices globally have forced buyers of U.S. LNG to cancel up to 45 cargoes for July loading as delivery became unprofitable, after at least 20 June cargoes were cancelled last month.
However, demand from some Asian buyers is recovering.
Buyers in China are taking advantage of low prices and are looking for cargoes for delivery from July onwards.
PetroChina likely bought a cargo from Russia’s Novatek that operates the Yamal LNG plant at $2.50 per mmBtu for the second half of July delivery.
It also bought a cargo from BP at $1.85 per mmBtu for mid-July delivery at S&P Global Platts’ Market on Close window on Friday.
Seven U.S. cargoes are expected to be delivered to China in May, the highest number of cargoes for this route since January 2018.
Some Indian companies were seeking cargoes too, including Gujarat State Petroleum Corp (GSPC) and Reliance Industries , while Taiwan’s CPC was looking to buy LNG for delivery from 2022 onwards, trade sources said.
Sell tenders came from Angola LNG, Indonesia’s Pertamina and Australia’s Ichthys, with the latter cancelling its offer citing changes in its production forecast. (Reporting by Ekaterina Kravtsova; Editing by Susan Fenton)