- China says it will cut prices for natural gas by an average 28% for commercial users in an attempt to boost demand, especially for liquefied natural gas, and help reduce the use of coal, WSJ reports.
- But the move only goes so far, as gas remains more expensive than fuel oil, Heard On The Street's Abheek Bhattacharya writes, and LNG producers will remain concerned that even higher Chinese demand will not be enough to absorb the supply emerging from Australia and elsewhere.
- Even if one assumes Goldman Sachs' rosy forecast for an average rise in Chinese demand of 13%/year until 2018, global demand for LNG will still be ~20% less than the liquefaction capacity producers are building, according to Bhattacharya.
- ETFs: UNG, UGAZ, DGAZ, BOIL, GAZ, KOLD, UNL, DCNG