• 3 minutes Natural gas is crushing wind and solar power
  • 6 minutes OPEC and Russia could discuss emergency cuts
  • 8 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 11 minutes Question: Why are oil futures so low through 2020?
  • 13 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 26 mins Oil and gas producers fire back at Democratic presidential candidates.
  • 2 mins "Criticism of migration will become a criminal offense.  And media outlets that give room to criticism of migration, can be shut down." - EU Official to the Media.
  • 51 mins Saudi Aramco launches largest shale gas development outside U.S.
  • 6 hours So the west is winning, is it? Only if you’re a delusional Trump toady, Mr Pompeo, by Simon Tisdall
  • 12 hours Peak Shale Will Send Oil Prices Sky High
  • 4 hours Charts of COVID-19 Fatality Rate by Age and Sex
  • 7 hours CDC covid19 coverup?
  • 10 hours What Is Holding Back Geothermal Heating and Cooling?
  • 21 hours Fight with American ignorance, Part 1: US is a Republic, it is not a Democracy
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.

Here's to seeing changes,

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