As everybody celebrates the budget, the gas cartel is busy in the background cutting every sinew in it.
East coast price caps for gas have failed. Spot gas prices are out of control again:
As usual, electricity prices are following directly:
At this price, another energy bill shock of 30-40% is in the making. That’s another 3% added to the CPI with spillovers. This will make Australia the hottest inflationary environment on earth, with more rate hikes and a renewed house price correction.
Meanwhile, you can buy Aussie gas in Asia 30% off at $14.60Gj:
Persistently weak demand is seen continuing in the LNG spot market, where consumers have ample supply, competing fuels prove to be cheaper and an absence of significant supply shocks have dragged Asian LNG prices to the lowest level in two years.
China’s spot demand for LNG has been below expectations to date in 2023 as it continues to utilize coal and renewable energy to meet its requirements.
China is still taking 71% of east coast gas, much of it on contract but, as we know, it is reselling it to Europe at a nice markup for around $21Gj.
Thus, Europe, the gas-poor giant, is awash with gas as Australia is starved of it:
In due course, Australia will be paying more for its own gas than Europe.
Enjoy your budget and “energy relief” as a new price shock shakes the very foundations of the economy.
