BOE report raises more LNG uncertainty

Must Read

Smoky Skies Bulletin issued Friday for Peace River South

FORT ST. JOHN, B.C. - Environment Canada has issued another Smoky Skies Bulletin for Peace River South. According to Environment...

Three new cases of COVID-19 identified in Northern Health Region

VICTORIA, B.C. – Three new cases of COVID-19 were confirmed on Friday, bringing the total in the Northern Health...

Economic recovery plan has “next to nothing” for British Columbians, says Wilkinson

FORT ST. JOHN, B.C. - The Provincial Government released its COVID-19 economic recovery plan on Thursday, and B.C. Liberal...

The online BOE report says while analyst estimates compiled by Bloomberg Business Week, show crude oil will recover next year, LNG prices will probably extend declines by as much as 25 per cent.

There’s speculation Brent crude next year could average $57.30 a barrel US, up about $13 from where it’s been trading this week.

However, the weekly business magazine also reports, as of November 23rd, LNG for delivery in the next 4-8 weeks in Asia cost $7.55  per million British Thermal Units.

- Advertisement -

That noted, it’s also reported that according to a survey of nine traders, executives and analysts the spot price may fall to as low as $5.70 next year.

As a result of a boom in production from shale formations, the US has become the world’s leading oil and gas producer and is now said to be poised to transform itself from an importer into a net exporter of LNG.

However, while American export facilities will add another 4.5 million tonnes next year, the main addition will come from Australia, where another 27.2 million will come on line, and there’s at least one forecast, that the global oversupply is expected to reach as much as 31 million tonnes, or eight per cent of capacity, by 2018.

The glut is said to be widening as China, Japan and South Korea aren’t importing as much as they used to, as a result of slower growth, over-contracting, and expansion of nuclear capacity.

In fact, according to a report out of Moscow, China’s LNG imports may decline this year, for the first time since they started a decade ago.

In addressing the global uncertainty, Johnathon Stern — founder of the Oxford Institute for Energy Studies — is quoted as saying, “The really big question, which frankly nobody can answer is whether lower prices will create more demand?”, adding, “If it doesn’t, prices will continue to go down.”

- Advertisement -

Community Interviews with Moose FM

Subscribe to our newsletter

Get the latest news delivered to your mailbox every morning.


More Articles Like This