• 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 13 minutes Could Venezuela become a net oil importer?
  • 18 minutes Oil prices going Up? NO!
  • 49 mins The Tony Seba report
  • 7 mins Could Venezuela become a net oil importer?
  • 34 mins Harley-Davidson "Made in EU"
  • 3 hours Time Of Recession - China and Europe Are Warning That A Trade War Could Trigger A Global Recession
  • 5 hours Erdogan After Erdogan: New Presidential Mandate After Yesterday's Elections
  • 9 hours LNG Shortage on the Way
  • 5 hours The U.S. Will Soon Give North Korea a Timeline of 'Specific Asks
  • 5 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 15 hours Are Electric Vehicles Really Better For The Environment?
  • 2 hours Could oil demand collapse rapidly? Yup, sure could.
  • 38 mins China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 7 hours Sell out now or hold on?
  • 15 hours OPEC soap opera daily update
  • 15 hours Kenya Eyes 200+ Oil Wells
  • 3 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 2 hours Oil prices going Up? NO!
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