This is a Free article. You will receive access to the full text.

Asian Spot Prices for LNG and other Energy Commodities

Free Article

Abstract:
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.

Download Executive Summary Download PDF

Energy Specializations: Natural Gas – Markets and Prices; Coal – Markets and Prices; Energy Modeling – Energy Data, Modeling, and Policy Analysis

JEL Codes: Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q35: Hydrocarbon Resources, Q38: Nonrenewable Resources and Conservation: Government Policy

Keywords: Spot energy prices, LNG, Asia, Inter-fuel competition, LNG contract trades, Cointegration, Vector error correction models

DOI: 10.5547/01956574.39.1.aali

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 39, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

© 2024 International Association for Energy Economics | Privacy Policy | Return Policy