Friday, January 22, 2016
In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.
Let’s take a look.
1. LNG demand is weak
- LNG demand slowed to a halt in 2015. Asia is the largest market for LNG – Japan alone accounts for one-third of all LNG imports.
- Japan restarted two nuclear reactors, which cut out some need for LNG. The economy is also flat. As a result Japan’s LNG demand fell by 4 percent in 2015 to 85 million tonnes (mtpa), according to Wood Mackenzie.
- China is far behind Japan in terms of LNG demand, but China is supposed to be the biggest driver of future growth. However, LNG consumption fell by 1 percent to 19.5 mtpa in 2015.
- Meanwhile, a wave of new supply is coming online in a bit of unfortunate timing.
- Spot LNG cargoes saw prices drop to below $7 per million Btu (MMBtu) in 2015, nearly one-third of the levels seen in early 2014.
- The LNG market is heading into what is likely to be a prolonged period of oversupply and the massive buildout of new export capacity seen over the past few years is over.
2. Refining margins falling
- Refining margins around the world fell by 34 percent in the fourth quarter of 2015 to just $13.20 per barrel, cutting into the one…