Asian LNG prices rise on surging oil prices along with also China tariffs 

Prices of Asia’s natural gas jumped This specific year — in tandem with crude — as most of the region’s long-term LNG contracts are linked to oil prices, Rajiv Biswas, Asia-Pacific chief economist at HIS Markit, told CNBC in an email.

“With world oil prices having moved higher in recent weeks as US sanctions on Iranian oil exports will be implemented in November, This specific is usually contributing to further upward pressure on Asian LNG contract prices,” he added. Average Chinese gas import prices jumped 23 percent compared to a year ago inside the second quarter, while Japanese contract prices were up 17 percent inside the same period.

When U.S. sanctions on Iran kick in next month, they could push oil prices to above $0 per barrel, some analysts predicted. During Asian trade on Tuesday afternoon, Brent crude was at $81.04 per barrel, along with also U.S. crude futures at $71.84 a barrel — up through above $60 per barrel at the start of This specific year.

Asia’s spot LNG market — which has been growing steadily — will also be hit inside the short term. Biswas expects Asian spot prices to move even higher to $11.85 per million British thermal units (mmBtu) by January 2019. Spot prices for the October delivery in Asia were at $11.40 per mmBtu, up 30 cents in a week, according to a Aug. 24 Reuters report.

Meanwhile, supply through Australia, the globe’s largest exporter of LNG, is usually tightening as domestic demand is usually fighting for a share of the pie with Asia. that will situation will remain until 2028, according to Nicholas Browne, director of gas along with also LNG research at Wood Mackenzie.

The bulk of growth in Asian demand is usually coming through China, as This specific switches through coal to gas.

Chinese demand has jumped 150 percent between 2017 along with also 2018 — generating up half of the global demand growth, according to Wood Mackenzie in a report. China is usually required to import record amounts of LNG again This specific winter, Browne added.

although Wood Mackenzie’s supply forecast for Australia shows that will “through 2028 there is usually not enough gas to meet both LNG contracts along with also demand,” Browne said. “More gas will need to be developed along with also commercialised, or LNG imported, to meet the needs of both the domestic market along with also to fulfil LNG contracts.”

“However, no fresh easy along with also economical sources of supply are currently available to the market,” he concluded.

that will could hit major buyers of Australian LNG, such as China’s Sinopec along with also Malaysia’s Petronas, Browne said.

According to a Wood Mackenzie report This specific week, some decisions surrounding future fresh LNG projects in Russia, the U.S. along with also Qatar might be coming up, while producers in Southeast Asia may expand their facilities to meet the demand.

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