Will crashing LNG prices resolve Australia's gas shortage?

The Brent oil price managed to rally a little Friday night on growing confidence that OPEC will renew its cuts:

Of course OPEC will renew. The alternative is carnage:

“Without the production cut agreement, I think you could basically target the low-to-mid $30s. I’m of the mind they extend it,” said Gene McGillian, manager market research at Tradition Energy. “The Saudis need the revenues from higher oil prices. They know that prices at $30 to $35 is trouble for them.”

…”The Saudis certainly sent a very strong message that they were not going to do this alone, and they were not going to be the swing producer and make room for other exporters. It was kind of a reiteration of what has been the Saudi position. They’ll play a stabilizing role but they’ll not play a swing-producing role,” said Daniel Yergin, vice chairman of IHS Markit, sponsor of the CERAWeek conference earlier this month.

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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.

Will crashing LNG prices resolve Australia’s gas shortage?