Great news for the east coast economy for as long as it lasts.
Asian export gas prices are surging:
We have become accustomed to the gas export cartel passing these prices through locally. However, the local gas spot price is still nailed to the ground. It is half the official price caps:
This has crashed the electricity spot price, which last week sank to a new post-Ukraine War shock low. The quarterly average is down to $65MW/h, far below the June QTR AEMO price update of $108MW/h:
Futures are still pricing stress owing to expected coal exits:
But, so far, good weather and excess gas have prevented any price shock coming onshore from Asia.
It is also possible that Albo’s cowards finally did enough to beat some sense into the gas cartel too:
The Federal Labor government’s centrepiece of gas intervention will have the desired effect of lowering prices, a Senate committee has concluded – rejecting opposition from industry giants such as Woodside Energy.
The federal government moved in late 2022 to impose a mandatory code of conduct – the centrepiece of which included a cap of $12 a gigajoule on new supplies – as heavy users led by Australia’s manufacturing sector complained their viability was at risk.
The code has led to a chorus of criticism from the gas industry, which says the penalties will deter investment in new supplies and exacerbate an eastern seaboard domestic shortage.
“The committee further notes the effects of the gas code of conduct are expected to flow into the retail sector and improve retail prices as contracts become due.”
The recent improvement is seasonal to some degree, but the code of conduct is probably helping.
There are significant utility bill price cuts coming if this holds.
