By Marwa Rashad

Asia's spot liquefied natural gas price rose this week, driven by a lack of progress on U.S.-Iran talks, a rise in spot demand from south and south-east Asia following QatarEnergy's extension of force majeure and stronger Japanese buying amid lower inventories.

The average LNG price for August delivery into northeast Asia (LNG-AS) was estimated at $16.40 per million British thermal units (mmBtu), up from $15.35 last week, industry sources said.

"Prices have ticked up this week as confidence erodes on any actual deal and vessel throughput is still running at a minimum, signalling low conviction in safe passage," said Toby Copson, managing partner at Davenport Energy.

"Chinese demand remains muted and north Asia broadly is sitting on its hands, so until physical flows confirm what the diplomats say, the fundamentals haven't materially changed," he said

Asian prices are expected to remain firm next week on stronger prompt demand from Japan amid lower LNG inventories and resilient non-power demand, seasonal restocking in South Korea, and higher gas-fired generation in India and Pakistan, said Ronald Pinto, gas research principal analyst at Kpler.

"Beyond domestic fundamentals, the main market mover will be the transit of LNG vessels through the Strait of Hormuz, which has slowed since last week despite increased dark-fleet activity. These dynamics will continue to drive inter-basin competition for LNG supply between Asia and Europe," Pinto said.

Qatar Energy has extended its force majeure notice to some Asian clients until August, traders said.

This has spurred a spate of spot demand in south and south-east Asia, with buyers seeking cargo replacements, said Martin Senior, head of LNG pricing at Argus.

Meanwhile, delayed nuclear maintenance and hotter weather forecasts combined with lower stocks than seasonal averages in South Korea is lifting demand expectations, Senior added.

In Europe, gas prices were around €44.55 per megawatt hour on Friday.

Temperatures are anticipated to rise again next week, keeping gas-for-power demand elevated, Lower wind generation across the continent and additional maintenance at Norway's Karsto facility could provide further upside, Kpler's Pinto said.

The market continues to monitor inventory levels, particularly given storage levels are below year-ago levels in several major European markets. Injection rates remain relatively modest compared with historical seasonal norms, said Aly Blakeway, head of Atlantic LNG at S&P Global Energy.

S&P Global Energy assessed its daily north-west Europe LNG price benchmark for cargoes delivered in August on an ex-ship (DES) basis at $14.648/mmBtu on July 2, a $0.24/mmBtu discount to the price at the TTF hub.

Spark Commodities assessed the price at $14.516/mmBtu, a discount of $0.245/mmBtu, while Argus assessed it at $14.680/mmBtu, a $0.230 discount.

In LNG freight, Atlantic rates were relatively steady at $90,750/day and Pacific rates dropped to $70,750/day, Spark Commodities analyst Qasim Afghan said.

U.S. Gulf Coast prompt cargos are currently priced at $13.278/mmBtu on July 2. The U.S. front-month arbitrage to northeast Asia via the Cape of Good Hope is firmly pointing to Europe, while the arbitrage via Panama is firmly pointing to Asia, Afghan said.