Japan’s wholesale electricity prices hit the maximum possible for a third day after the government set upper limits on moves last week amid the worst power crunch since the Fukushima disaster nearly a decade ago.
Factbox: Asian spot LNG prices hit record highs on supply glitches, demand spike
Asian spot LNG prices have risen to unprecedented levels due to February cargo shortages, transportation bottlenecks, supply outages and record winter temperatures boosting end-user demand.
Futures signal JKM prices could ease for March delivery but a looming cold snap in the Northern Hemisphere in the US and Europe present significant upside risk for global gas markets.
PRICES The S&P Global Platts JKM for February was assessed at a record high of $32.494/MMBtu on Jan. 12. This is the highest for the LNG benchmark for Asian spot LNG since it was launched in early 2009.
SINGAPORE (Jan 13): Asian utilities are snapping up prompt supplies of fuel oil an emergency backstop for natural gas as power demand surges across the region due to a winter freeze. Power generators in Japan such as Tohoku Electric Power Co recently bought several cargoes of low-sulfur fuel oil for the purpose of direct burning, said traders who asked not to be identified. These supplies can be used in oil-fired power plants, which are typically left in an idled state and utilized only when gas-fed facilities have been maximized.
The scarcity of on-the-water LNG cargoes heading to Asia and a constriction in supply for loading in late January meant that buyers of prompt deliveries have been left with a dearth of options during the week of Jan. 12, according to industry participants and vessel-tracking data. This comes even as bids for early February deliveries .