• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 1 hour Which producers will shut in first?
  • 5 mins What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 5 hours The Most Annoying Person You Have Encountered During Lockdown
  • 17 mins Its going to be an oil bloodbath
  • 3 hours Why should ANY oil company executive get ANY bonus now?
  • 10 hours How to Create a Pandemic
  • 10 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 14 hours KSA taking Missiles from ?
  • 16 hours Dr. Fauci is over rated.
  • 9 hours Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 7 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 16 hours Breaking News - Strategic Strikes on Chinese Troll Farms
  • 16 hours CDC covid19 coverup?
Dave Forest

Dave Forest

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

More Info

Premium Content

Is This Key Energy Indicator Finally Falling?

There's been one factor driving the international gas market lately. Asian LNG prices.

Prices for LNG into Japan and Korea spiked the last few years. Following Japan's nuclear fleet going offline in the wake of the Fukushima disaster. As well as some of Korea's reactors being idled after a certification scandal.

Both nations have looked to LNG to fill the power gap. Creating a perfect storm that's driven prices over $20/MMBtu, as recently as February.

But news this week suggests this effect may be moderating. An observation that should give pause to all investors exposed to international gas pricing.

Platts reports that the "Japan-Korea Marker" LNG price has fallen to $15.60/MMBtu. A significant decline from the high of $20.20 we saw just several weeks ago.

Some of the weakness is due to the LNG market moving into a "shoulder season" of lower demand. But stats from other parts of the world show that Asia may be seeing more than just the usual market slackening.

The big number here being LNG prices in Europe. Which are remaining stubbornly high.

Southwest European LNG was selling at $12.91/MMBtu this week. Down from a high this year of $17.18. A much less significant fall than Asian prices have taken.

The tandem moves have caused Asia's premium to Europe to contract. To a current $2.68/MMBtu--down significantly from the $3.31 premium seen earlier in the year.

Traders suggest that the reduced premium may have to do with strong South American LNG demand pushing up European prices. But the narrowing Asian margin could also signal that demand is moderating in eastern markets.

This would make some sense. Given that Japanese power generators particularly have been under pressure to use cheaper fuels like coal.

Perhaps high international gas prices are finally eating into consumption. If so, we could soon get a realigning of international gas markets. Important for both consumers and firms selling gas on the global market.

Here's to the key markers,

By Dave Forest


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




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