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The Brent oil price took off last night before settling back to $38.43, up 1%, for no reason except markets got too short. Henry Hub gas, however, continued to crater, hitting a 14 year low at $1.82mmBtu:
This is not especially auspicious for Australian LNG given that the US can now ship it to North Asia for just $4mmBtu. Not sustainable, certainly, and caused in part by favourable El Nino warmth, but a signal nonetheless that the US will be able to compete fiercely with the Aussies, not least if the east coast plants find themselves a little short of inventory.
The oil-linked LNG contract price rose to $5.40mmBtu:
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.