OPEC’s Plan to Cut Crude Oil Production Surges Asian LNG price to USD7.40/MMBtu

China: The decision taken by OPEC countries and Russia to cut their crude oil production, to overcome the oversupply condition of crude oil has positively impacted the Asian LNG market. The Asian spot LNG price has increased by 30 cents from last week and this has reached to around USD7.40 per million British thermal units (MMBtu). Around 80% of LNG contract has been linked to crude oil price and this step would not only increase the crude oil price but also surge the price of spot and long term contract of LNG.  

TechSci Research depicts that the increasing spot LNG price would boost the LNG market due to uncertainty in the further increase in global LNG prices. Moreover, growing focus on expansion of gas pipeline infrastructure, rising demand for natural gas from downstream sectors, declining LNG prices coupled with implementation of favorable government policies is boosting demand for LNG across the globe. Increasing focus on development of adequate support infrastructure in various developing as well as developed economies is expected to boost LNG demand in the coming years.

According to released report of TechSci Research “Global LNG Market Competition Forecast and Opportunities, 2011-2021”, global industrial valves market is projected to cross global LNG supply market is forecast to exhibit a CAGR of over 5% during 2016-2025, on account of rising demand for cleaner fuels; oversupply of LNG due to liquefaction capacity additions in Australia, US and Papua New Guinea, and declining prices of LNG over the last few years. Also, with increase in development activities by Shell to explore and produce gas is expected to boost the demand for LNG. In addition, increase in spot market purchase is expected to keep LNG prices under check in Asia-Pacific and Europe.