Daily LNG price update (crash)

Sunday 26 February 2017

There is no change in the dynamics for the global oil market. We’re in some form of equilibrium as OPEC cuts and the US expands production. Downside is protected by OPEC jawboning, upside by the rising US rig count.

LNG on the other hand is weakening fast. One of the big downsides for the oil balance is that more US rigs produce more US gas as a byproduct and as winter demand passes the price is crashing:

The price is bouncing off support around $2.60mmBtu but I expect it to go lower yet as rig numbers keep climbing:

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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.