ASIA: THREE TIMES PRICES
REUTERS. Japan's Chubu Electric Power said on Monday it has signed a deal with India's GAIL (GAIL.NS) to consider cooperation in joint procurement of liquefied natural gas (LNG), as Asian buyers look for stable and lower prices of the fuel.
Rising demand for LNG in Asia, already the top destination for the fuel, has helped push its price to near-record levels and now buyers such as India, Japan and South Korea are trying to find ways to cut their soaring gas import bills.
The two firms had been considering a preliminary deal on joint purchases since January. India, Japan and other Asian countries that together import 70 percent of the world's LNG met in December to discuss forming a buyers' club to get a better deal from suppliers.
State-run Korea Gas Corp (KOGAS) (036460.KS) and a Japanese company bought natural gas jointly on Monday and such cooperative purchases will become more common, the head of state-run Japan Oil, Gas and Metals National Corp (JOGMEC) said.
Asian prices are at least three times the cost of natural gas in the United States, where a boom in shale oil and gas has sharply reduced prices.
Asian importers say they are charged an excessive premium over other regions because of a practice of linking LNG contracts to oil prices. They also want more flexibility in contracts over ship destinations to free up the market.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.