Ann: COE: Operations update, page-2

Gas up, surely this thing has to rally at some point.

Energy price rally could run further: CBA

Prices for Australian thermal coal have jumped close to their record highs while liquified natural gas prices have also surged through the month in a rally that has added fresh support to the oil price, according to CBA.

Spot LNG prices have edged toward $US30 per metric million British thermal unit, for gas devliered to North Asia, while Australian thermal coal sits at $US180 per tonne, within striking distance of the record high $US195 achieved in July 2008.

Spot LNG prices have surged in September and are closing in on $US30/mmbtu (delivered into North Asia). Meanwhile, thermal coal prices are tracking just north of $US180/t (FOB Australia, 6000kcal/kg Net‑As‑Received). Prices remain just below record‑highs of $195/t reached in July 2008.

“The rise in both fossil fuels have helped drive oil prices higher,” said Vivek Dhar, mining and energy commodities analyst for CBA. “Brent oil futures are closing in on $US80/bbl and are currently at the highest level since October 2018,” he said in a Tuesday research note.

The jump in gas prices reflects demand from China, where there are worries about an energy shortage in the upcoming winter. In Europe, gas prices have jumped because of shortages. The 73 per cent capacity of gas storage levels compares with 88 per cent on average over the past five years.

“The gas shortage in Europe reflects deeper cuts to Norway’s gas production and stronger gas‑powered demand,” Mr Dhar said. “The latter reflects the impact of calmer weather and reduced wind power generation, as well as the phase out of Europe’s aging nuclear plants.”