• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 7 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 hour Reality catching up with EV forecasts
  • 11 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 9 hours Famous author Michael Crichton talks about the "Climate Change Religion" aka Feudalism 2.0
  • 5 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 10 days A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
3 Natural Gas Stocks To Watch As Prices Tank

3 Natural Gas Stocks To Watch As Prices Tank

Natural gas prices plunged at…

Everybody Loves Oil Again

Everybody Loves Oil Again

The reopening of the Chinese…

LNG Prices Climbing As China Scrambles To Secure Supply

As millions of Chinese households make the switch from coal to natural gas for the first time this winter season, China is buying up liquefied natural gas (LNG) cargoes on the spot market, pushing prices higher than the prices of the oil-indexed LNG cargos in the long-term delivery contracts.

Asia’s spot LNG prices have jumped by more than two-thirds since May this year to $9 per million British thermal units (mmBtu), according to Reuters. This compares with oil-pegged prices of some $8 per mmBtu.

In July, the International Energy Agency (IEA) predicted that China would account for 40 percent of the global annual growth in natural gas demand over the next five years. Chinese imports of natural gas are running at record rates as Beijing pushes on with its cleaner energy agenda that should see the country satisfy 10 percent of its energy needs with gas in 2020, up from what was only 5.9 percent in 2015.

ADVERTISEMENT

China’s LNG imports in September surged to their second-highest on record, as the country imports an increasing amount of gas to fight severe pollution and to service households in the north who will be using gas for heating this winter for the first time. China’s September LNG imports soared by 37 percent compared to September last year, according to data by the General Administration of Customs. The volume was a bit lower than the all-time high of 3.7 million tons of LNG imports in December last year. Year to date, Chinese LNG imports soared 43 percent. 

In the first week of October, Asian spot LNG prices jumped to their highest level since January, driven by the Chinese gasification push, and were slightly higher than oil-linked LNG prices.

ADVERTISEMENT

Related: Trump’s China Trip To Reap Billions In Energy Deals

Now that winter is drawing closer, prices are up even more, with Chinese scrambling to import as many LNG cargoes as possible.

“The Chinese are in panic mode. They clearly underestimated the push in demand from their gasification program. Now they are soaking up LNG spot cargoes where they can. And suppliers are happy to deliver, at a premium,” a trader with a major commodity merchant told Reuters.

“I‘m fairly certain China will break a new import record very soon and that spot prices will break through $10,” the trader noted.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

ADVERTISEMENT


ADVERTISEMENT


Leave a comment
  • NickSJ on November 03 2017 said:
    China should encourage heating with heat pumps fueled by nuclear generated electricity. They have an active and successful nuclear power program. If greens were really concerned about CO2 emissions, they would be big nuclear power fans.

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