Daily Management Review

Producers note Asia's switch to petroleum-based fuels


Demand for oil fuel is rising in some parts of Asia amid growing gas prices, Patrick Pouyanne, head of TotalEnergies, told the Evolen conference in Paris.

Gennadiy Kolodkin via flickr
Gennadiy Kolodkin via flickr
"What is happening with gas could be worrying for some emerging economies in Asia. Some Asian countries are now going back to using oil fuels, which could have an impact on the oil market," Bloomberg News Agency quoted the head of TotalEnergies as saying.

In addition, as Pouyanne noted, in the longer term, a jump in natural gas prices could limit the supply of liquefied natural gas (LNG) to emerging markets such as Pakistan, Vietnam, Bangladesh and India. He believes it could encourage buyers to switch to long-term contracts instead of being exposed to volatility in the spot market.

Analysts at Rystad Energy earlier noted that the rally in the LNG market is pushing Asia to shift power generation from gas to oil, demand for which could increase by 400,000 bpd in the next two quarters.

Gas prices in Europe have risen sharply in recent months. At the beginning of August, the estimated price of the closest futures on the Dutch TTF index was around 515 dollars per thousand cubic metres and by the end of September the figure had more than doubled. On 6 October, a record price of USD 1,937 per 1,000 cubic metres was reached.

source: bloomberg.com