Turmoil In Global Gas Market


◊ Natural Gas News China


⇑⇓ StockMarketNews.Today ⇓⇑


Chinese importers threatening to cancel up to 70 per cent of seaborne imports in February as demand collapses and companies struggle to staff ports. The move by China, the world’s second-largest importer of liquefied natural gas, has sent prices to their lowest level on record and sparked a row with suppliers, which claim the Chinese companies are breaching their contracts to secure lower prices on the spot market.

The stand-off is the latest sign of the economic damage being wreaked by the coronavirus outbreak, which is expected to curtail global growth as large parts of the world’s second-largest economy essentially are in lockdown.

Lower gas prices are a potential boon for manufacturers and consumers but a problem for energy companies, which have warned of a big hit to profits in the first half of this year. Oil demand in China is also estimated to have fallen by as much as a quarter in February, as big cities have been quarantined, flights cancelled and public holidays extended to try to contain the spread of the virus, which has killed more than 600 people and infected more than 31,000.



Two of China’s largest energy groups have already declared “force majeure” on at least 14 LNG import cargoes, invoking a clause usually reserved for natural disasters or war that frees both sides from the contract. Chinese LNG buyers are likely to issue more such notices in the coming days, according to people with knowledge of the transactions.

Some LNG tankers are said to have been diverted from southern Chinese ports to the north. But analysts say other large markets in Asia and Europe are saturated amid a global supply surfeit, meaning ships are likely to anchor off Chinese shores as floating storage. Wholesale gas prices in the UK are close to the lowest level since the financial crisis.

“The prospect of a flotilla of diverted LNG carriers sailing around the world looking for a home only adds to the bearish sentiment,” said Frank Harris, global head of LNG at consultancy Wood Mackenzie.

A glut of natural gas has already depressed Asian LNG prices to a historic low of $2.95 per million British thermal units. LNG sellers complain that China’s use of the force majeure clause is at least partly motivated by importers’ desire to buy at cheaper spot prices instead of cargoes imported under their long-term contracts.

The LNG market has grown rapidly in recent years, boosted by greater supplies from the US and Australia. The rise in seaborne gas trade has connected regional markets and brought prices closer together, meaning a drop in Asia can now mean cheaper prices in Europe, and vice versa.

Of the cargoes already cancelled under force majeure, 10 were issued by China National Offshore Oil Corporation (Cnooc) to Royal Dutch Shell, with PetroChina refusing to take two cargoes from Qatar and two from Malaysia — including one due for delivery in March — according to people with knowledge of the contracts.

As many as 50 cargoes, or 70 per cent of February’s total imports, are now thought to be at risk of cancellation over the coming days, as buyers including Sinopec have sent out notices saying they will struggle to take them.

China imported an average of almost 7bn cubic metres a month of the supercooled fuel last year, according to consultancy Energy Aspects. Although China has expanded its storage in recent years, capacity remained limited, analysts at ANZ said. LNG suppliers, traders and lawyers are questioning the legitimacy of declaring force majeure due to a drop in demand following the spread of the coronavirus.

“There are substantial questions about whether it’s appropriate,” said Jason Feer, global head of business intelligence at Poten & Partners, a broker. “They’re getting a lot of pushback from suppliers saying low prices and full tanks is not a force majeure event.”

France’s Total said it had rejected a majeure notice from one Chinese company.

“Our legal analysis is that there is no force majeure,” said Philippe Sauquet, Total’s president of gas, renewables and power. “We have to be careful because if there is a real quarantine in a loading or unloading port, there will be a real case for force majeure in China.”




START TRADING NOW OR TRY A FREE DEMO ACCOUNT




STOCK MARKET ›
NEWS ›
TODAY ›
BUSINESS ›
ECONOMIC INDICATORS ›
COMMODITIES ›
INSIGHTS ›






Tesla Resume Production In Shanghai



U.S. electric carmaker Tesla‘s factory in China’s financial hub of Shanghai will resume production on Feb. 10 with assistance to help it cope with a spreading epidemic of coronavirus, a Shanghai government official said on Saturday.

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future

Many factories across China shut in late January for the Lunar New Year holiday that was originally due to end on Jan. 30 but which was extended in a bid to contain the spread of the new flu-like virus that has killed more than 700 people.

Tesla warned on Jan. 30 that it would see a 1-1.5 week delay in the ramp-up of Shanghai-built Model 3 cars as a result of the epidemic, which has severely disrupted communications and supply chains across China.

Tesla Vice President Tao Lin said this week that production would restart on Feb. 10.

“In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible,” Shanghai municipal government spokesman Xu Wei said.

The $2 billion Shanghai factory is Tesla’s first outside the United States and was built with support from local authorities. It started production in October and began deliveries last month.

The Shanghai government also said on Saturday it would ask banks to extend loans with preferential rates to small companies and exempt firms in hard-hit sectors like hospitality from value-added tax, among other measures to prop up businesses during the epidemic.

Such assistance would also apply to foreign companies, it added.




Best Books For Making Money In The Stock Market


#1 – The Intelligent Investor. (Revised Edition)

This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.



#2 – Encyclopedia of Chart Patterns

In this revised and expanded second edition of the bestselling Encyclopedia of Chart Patterns, Thomas Bulkowski updates the classic with new performance statistics for both bull and bear markets and 23 new patterns, including a second section devoted to ten event patterns. Bulkowski tells you how to trade the significant events — such as quarterly earnings announcements, retail sales, stock upgrades and downgrades — that shape today?s trading and uses statistics to back up his approach. This comprehensive new edition is a must-have reference if you’re a technical investor or trader. Place your order today.
“The most complete reference to chart patterns available. It goes where no one has gone before. Bulkowski gives hard data on how good and bad the patterns are. A must-read for anyone that’s ever looked at a chart and wondered what was happening.”
— Larry Williams, trader and author of Long-Term Secrets to Short-Term Trading.



#3 – How to Make Money in Stocks

Anyone can learn to invest wisely with this bestselling investment system!… Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System―a proven 7-step process for minimizing risk and maximizing gains―has influenced generations of investors.

Based on a major study of market winners from 1880 to 2009, this expanded edition gives you:

>Proven techniques for finding winning stocks before they make big price gains
>Tips on picking the best stocks, mutual funds, and ETFs to maximize your gains
>100 new charts to help you spot today’s most profitable trends
>PLUS strategies to help you avoid the 21 most common investor mistakes!

“I dedicated the 2004 Stock Trader’s Almanac to Bill O’Neil: ‘His foresight, innovation, and disciplined approach to stock market investing will influence investors and traders for generations to come.’”
―Yale Hirsch, publisher and editor, Stock Trader’s Almanac and author of Let’s Change the World Inc.

“Investor’s Business Daily has provided a quarter-century of great financial journalism and investing strategies.”
―David Callaway, editor-in-chief, MarketWatch

“How to Make Money in Stocks is a classic. Any investor serious about making money in the market ought to read it.”
―Larry Kudlow, host, CNBC’s “The Kudlow Report”.


One thought on “Turmoil In Global Gas Market

  1. Pingback: Turmoil In Global Gas Market... Chinese importers threatening to cancel up to 70 per cent of seaborne imports in February ... -

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.