Asian Spot Prices for LNG and other Energy Commodities

We investigate the relationship between the Japan-Korea Marker (JKM) price of LNG, which has become more important as spot trading of LNG has increased, and spot prices of Brent oil, fuel oil and thermal coal in Asia. We find that the JKM price appears to reflect inter-fuel competition in Asia. In t...

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Bibliographic Details
Published in:The Energy journal (Cambridge, Mass.) Mass.), 2018-01, Vol.39 (1), p.123-142
Main Authors: Alim, Abdullahi, Hartley, Peter R., Lan, Yihui
Format: Article
Language:English
Subjects:
Coal
Commodities
Derivatives
Economic activity
Energy consumption
Energy industry
Energy prices
Fuel oils
Gasoline prices
Global economy
Liquefied natural gas
Literature reviews
Natural gas
Natural gas prices
Oil
Oils & fats
Petroleum production
Pricing
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Summary:We investigate the relationship between the Japan-Korea Marker (JKM) price of LNG, which has become more important as spot trading of LNG has increased, and spot prices of Brent oil, fuel oil and thermal coal in Asia. We find that the JKM price appears to reflect inter-fuel competition in Asia. In this respect, it could be better than oil or other spot natural gas prices as a reference price for indexing long-term LNG contracts in Asia. The JKM may also be suitable for underpinning the development of an LNG pricing hub in Asia with associated derivatives markets.
ISSN:0195-6574
1944-9089
DOI:10.5547/01956574.39.1.aali