Tesla's market share has significantly…
European natural gas demand is…
Restrictions on shipping via the Panama Canal due to drought have made the transportation of U.S. LNG to Asia more expensive, widening the gap between Asian and European LNG prices.
Per a Bloomberg report, the price premium for Asian to European gas deliveries for the summer of 2024 has soared twofold since October. The premium for winter 2024 deliveries has also increased because of the drought-related restrictions.
Earlier this month the Panama Canal authorities said they would reduce the number of available slots due to a severe drought, per a Reuters report.
"The recorded precipitation for October has been the lowest on record since 1950 (41% below), and so far, 2023 ranks as the second driest year for the same period," the Panama Canal Authority said, adding this drought had reduced the water level in the reservoir that floats ships through the canal.
The situation is pushing freight costs higher elsewhere as well in a knock-on effect as vessels delayed at the Panama Canal become unavailable for use on other trade routes, according to the Energy Information Administration.
U.S. exports of liquefied natural gas reached a record high during the first half of the year, averaging 11.6 billion cu ft daily, the Energy Information Administration reported last month. This was up 4% on the year and came despite a decline in exports in May and June, the EIA noted.
The top destination for U.S. LNG was the Netherlands—it received the most LNG for five consecutive months this year, through September. Japan came second, followed by France, South Korea, and Italy.
Currently, LNG export facilities in the United States have a combined operating capacity under real-world operating conditions of 11.4 billion cu ft daily. There is another 7.3 billion cu ft daily of capacity under construction, while a further 18.3 billion cu ft daily of possible LNG export capacity has received full regulatory approval from the U.S. Department of Energy and the Federal Energy Regulatory Commission.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com