The theme of the day for today's session is China, where economic uncertainty is being fuelled by the debt problems of China's leading private developer, Country Garden, and a near 89% drop in new bank lending compared to June this year (thus notching the lowest levels since 2009).
In the background, however, uncertainty continues to smoulder around the gas market, where strikes in Australia have rekindled turmoil in the LNG market. Today, the regulator there allowed unions to hold a ballot over strikes at Cheveron's Wheatstone and Gorgon platforms, which could further exacerbate uncertainty in the LNG market.
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In terms of liquefied natural gas (LNG) exports, here Australia boasts the third largest exporter. Source: Bloomberg Finance L.P.
A breakdown of Australia's major LNG plants. Three of them are expected to see worker strikes. Source: Bloomberg Finance L.P.
Gas demand in the northern hemisphere remains tight, with several months to go before the heating season begins. However, the prospect of a prolonged shutdown has sent wholesale gas prices soaring, compounded by extreme weather events in the US and other regions.
Significantly, however, the scale of the affected annual capacity in Australia is just over two and a half times that of the US Freeport in Texas, where a months-long outage caused by an explosion and fire in June 2022 rocked the gas market.
If strikes at Australia's Gorgon, Wheatstone and North West Shelf plants (here workers have already voted to strike) last a month, they could cut nearly three million metric tonnes of supply from the market.
Japan, Thailand and Taiwan received about a quarter of the LNG shipments this year for Japan, Thailand and Taiwan came from these plants. Moreover, they also accounted for 14% of China's imports and 28% of Singapore's.
NATGAS quotations halted the downward impulse at the limit set by the retracement of the 78.6% Fibo of the downward wave initiated in March this year, when we also saw this year's highs. On a daily basis, the gas is gaining close to 1% and is trading within close proximity to the daily maximums of Friday's session. Source: xStation 5
