• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 9 days Does Toyota Know Something That We Don’t?
  • 3 days America should go after China but it should be done in a wise way.
  • 9 days World could get rid of Putin and Russia but nobody is bold enough
  • 11 days China is using Chinese Names of Cities on their Border with Russia.
  • 9 hours Even Shell Agrees with Climate Change!
  • 11 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 2 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 12 days Putin and Xi Bet on the Global South
  • 12 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
Dave Forest

Dave Forest

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

More Info

Premium Content

The One Thing You Need to Follow in LNG

Japan.

Last week, Timera Energy put out the excellent chart below. Showing how Japanese demand is the driving force in global gas markets right now.

evolution of gas pricing
This is a great view of the evolution of gas pricing. Prior to to 2008, prices in Japan, the U.S., the U.K. (NBP), and Russia were more or less in line. Then everything collapsed. Since then, Japanese gas prices (the red lines) have been by far the highest bar in the market.

Related article: China’s Hydrocarbon Buying Spree Hits $19billion

The really interesting thing is the effect of nuclear shut-downs following the Fukushima nuclear incident. In early 2010, it looked like Japanese and U.K. prices were going to converge around $10/mmbtu. But then Fukushima hit, driving Japanese prices well above $15.

The question is: what will happen if Japan's nuclear reactors come back online?

On that front, it's interesting to note that U.K. prices seem to have settled out in the $8 to $10 range. Given that Europe is one of the other major, competing destinations for LNG, it would appear that--absent Fukushima demand--Asian prices would probably slip back toward this level.

South American LNG demand is a wildcard. Strong buying from Brazil and Chile this year has driven spot prices to near-Japanese levels. But much of this was a result of seasonal factors (not enough rain to drive hydro-power, for example). It's thus not certain the same level of demand, or pricing, will persist.

Related article: Making the Most of your Money with E&P Micro Caps

With more environmental problems recently having emerged at Fukushima, we probably won't be seeing a big Japanese nuclear re-start right away. But the nation can ill-afford to keep all of its plants idle. Re-start applications have been submitted. And we will see units fire back up over the next several months.

If you're invested in LNG-sensitive industries, that progress will be the most important story of the coming year.

ADVERTISEMENT

Here's to seeing changes,

By. Dave Forest


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News