Shine Trader Live reports:
Energy importers from Japan to India are buying at inflated prices as Europe’s energy crisis scares fuel buyers in Asia.
Liquefied natural gas traders in Asia say they are trading at record prices amid fears of unjustified price spillovers from European gas. Buyers in China and Pakistan also pushed up prices of natural gas, coal, propane and refined oil products to compete with those in the UK and Spain.
With colder weather and global shortages, the battle for energy may not subside anytime soon. The trend of higher global energy prices is expected to continue through the winter as demand in the northern hemisphere picks up, pushing up inflation and casting a shadow over the fragile economic recovery.
Ogan Kose, Managing director and global head of Accenture’s natural gas sector, said:
“Asia is starting to panic, partly because they had a very difficult winter last year.”
He added that buyers are buying at the top of their price in order to have adequate inventories for a possible cold winter.
This is particularly evident in the LNG market. On Wednesday, Japan’s Tohoku Electric Power Co. and India’s Gail LTD bought liquefied natural gas for November and December deliveries at their highest prices this year, according to traders familiar with the deal.
Traders said th
e high deal was partly due to concerns that the surge in European gas prices this week could spill over, pushing up spot prices for Asian LNG to already seasonally high levels. The traders spoke on condition of anonymity to discuss further details.
Pacific LNG trading activity has stalled in recent weeks because of price volatility, but the risk of further price rises in Europe could prompt more Asian importers to return to the spot market.
Faced with high prices, end-users in Asia have previously opted to increase supply by buying cheaper long-term contracts linked to oil, or stopped buying spot gas altogether in a bet that prices would eventually fall, but prices have held up so far.
Reprint indicated source：Shine Trader Limited Live information