• 4 minutes China goes against US natural gas
  • 12 minutes WTI @ 67.50, charts show $62.50 next
  • 15 minutes Saudi Fund Wants to Take Tesla Private?
  • 1 hour Downloadable 3D Printed Gun Designs, Yay or Nay?
  • 23 mins Peak Oil is Now!
  • 12 hours Rattling With Weapons: Iran Must Develop Military To Guard Against Other Powers
  • 46 mins Russians hacking vs U.S., Microsoft President: Russians Targeting All Political Sides
  • 1 hour Corporations Are Buying More Renewables Than Ever
  • 7 hours VW Receives Massive Order Of 1,600 All-Electric Trucks
  • 15 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 19 hours CO2 Emissions Hit 67-Year Low In USA, As Rest-Of-World Rises
  • 22 hours The EU Loses The Principles On Which It Was Built
  • 12 hours Batteries Could Be a Small Dotcom-Style Bubble
  • 22 hours Film on Venezuela's staggering collapse
  • 21 hours Saudi PIF In Talks To Invest In Tesla Rival Lucid
  • 18 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
Dave Forest

Dave Forest

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

More Info

Trending Discussions

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




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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