• 6 hours Did U.S. just start war with China? $60 Billion tariff package coming fast
  • 2 hours Surprise! Aramco Scraps International Listing Plans
  • 2 hours Self-Driving Cars' First Fatality
  • 2 hours The Facebook/Cambridge Analytica Scandal
  • 6 hours Goldman Sachs Expects Tesla to Miss Model 3 Targets Again
  • 4 mins API Inventory Data (Tuesdays)
  • 8 hours Flying Taxis In New Zealand - Very Soon?!
  • 2 hours Trump Bans Venezuelan National Cryptocurrency
  • 2 hours McDonald's Sets Greenhouse Gas Reduction Targets
  • 4 hours Why do Driller stocks move with the daily price of oil?
  • 5 hours Country With Biggest Oil Reserves Biggest Threat to World Economy
  • 2 hours Why Is The EU Spending Billions On A Gas Pipeline If It Wants To Fight Climate Change?
  • 22 hours Tillerson just sacked ... how will market react?
  • 22 hours Is Trump Harming Oil Industry?
  • 32 mins New Rules to Phase Out Coal and Reduce Natural Gas in Canada
  • 7 days Terminator plans to sue big oil for 'first degree murder'
Alt Text

Huge Chinese Demand Fuels The Next U.S. Gas Boom

China’s push for cleaner cities…

Alt Text

Natural Gas Exports Could Be Hit By Trump’s Trade War

President Donald Trump’s controversial tariffs…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

Is This The End Of The LNG Story?

Is This The End Of The LNG Story?

One nation has been a focus for the energy world of late: Japan. With this country being looked to for answers when it comes to global uranium demand.

But Japan is also a key driver for another critical commodity: natural gas. And some statistics released late last week show this market is now looking incredibly weak.

As reported by Bloomberg, a consortium of Japanese power companies reported data on their fuel usage -- showing that liquefied natural gas (LNG) use is seeing a major decline in the country. Related: Low Oil Prices Throw North Sea Oil Into A State Of Crisis

The report was issued by Japan's Federation of Electric Power Cos -- an industry group representing the country's 10 major utilities. Groups that use the majority of Japanese coal, natural gas, and other petroleum products.

But the numbers showed that natural gas is losing favor as a fuel of choice. During August, use of LNG by the Federation's members hit the lowest level in five years. Related: Aussie PM Ousted As Commodities Pressure Proves Too Much

Equally interesting was the fuel that's replacing LNG across Japan. Not fuel oil -- which hit a six-year low in demand during August. But rather, coal.

Japan's 10 major utilities set a monthly record for the amount of coal burned in August. With total consumption hitting 5.82 million tonnes -- the highest level since the government began tracking such data in 1972.

This suggests that Japanese fuel buyers are taking advantage of currently-cheap coal prices. As I mentioned in last week's Prime Meridians, coal in places like Indonesia has recently been hitting all-time low price levels. Related: Oil Price Increase Will Not Come Fast Enough To Save Alberta

But the interesting thing is -- LNG is also relatively cheap right now. With Japanese prices (as measured by the Platts Japan/Korea Marker) having fallen to near $7 per MMBtu the last few months, down from over $20 a few years ago.

The stats from Japan's utilities however, suggest that coal is getting cheaper faster than LNG. Prompting generators to switch to the black stuff. A fact could put a serious dent in global LNG demand, for as long as the coal market remains depressed.

Observers in the LNG industry, take note.

Here's to making the switch,

Dave Forest

More Top Reads From Oilprice.com:

Back to homepage

Trending Discussions

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News