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SINGAPORE (Reuters) - Asian spot liquefied natural gas prices fell from a two-year high this week as a production restart in Angola and Australia plants boosted supply back into a subdued market, which was reeling under outages and high seasonal demand.
The spot price of LNG for February delivery to North Asia fell to $9.50 per million British thermal units (mmBtu), 25 cents lower than last week's level, traders said.
Prices for March deliveries were significantly lower at around $8.25/mmBtu and in focus as the market prepares to shift trade from February to March cargoes, the traders added.
"The market has softened this week," a Singapore-based trader said, pointing to the many sell tenders floated by producers.
A deluge of sell tenders that were released by Indonesia, Australia, Angola and Abu Dhabi this week, signalled that the market is to be well-supplied.
Abu Dhabi LNG and Australia's Gladstone LNG had each offered a cargo for loading in February.
Supplies between May and October are also expected to remain high after Indonesia's Donggi-Senoro LNG plant offered three cargoes, while Australia Pacific LNG also offered three.
Prices for March cargoes are likely to edge lower as demand slides due to the rise in temperatures in the northern hemisphere.
Japanese buyers were said to have held bids for March-delivery cargoes at around low-$8.00/mmBtu, a second Singapore-based trading source said.
Angola LNG, which resumed production this month after a shutdown in December, issued a tender for a prompt cargo loading between Jan. 10 and Jan. 12.
The Angola LNG tender signals to the market that production at the plant is now stable, a sign that the trading community was waiting for to assess the market impact when news that the plant had restarted last week emerged.
Results of the tender were not immediately known, but traders are watching the results closely to gauge the difference in LNG prices in the Atlantic and Pacific basins, they said.
"Europe is in the spotlight now because of harsh winter and prompt LNG demand emerging," a third Singapore-based trader.
Deals are being discussed for deliveries into southern France where congestion on the pipeline grid is preventing gas from being shipped down from the north, forcing the system operator to seek LNG shipments.
The French southern gas hub contract touched its highest level of 40 euros/MWh since December 2013 on Wednesday due to congestion.
Reporting by Mark Tay in SINGAPORE and Oleg Vukmanovic in MILAN; Editing by Sherry Jacob-Phillips