Page 6 - AfrOil Week 27

AfrOil NEWSBASE GLOBAL ROUNDUP (NRG) AfrOil

NRG: Bracing for the second wave

Oil prices have risen further, but the recovery could be checked by a surge in coronavirus infections

COMMENTARY WELCOME to the latest edition of NewsBase’s Asia-Pacific: Australian gas prices
Roundup Global (NRG), in which our team of Australia’s upstream industry lobby has used a
international editors provide you with a snap- new International Gas Union (IGU) report to
shot of some of the key issues affecting their counter arguments that the country’s wholesale
regional beats. Get the NRG Oil & Gas Editor’s natural gas prices are too high.
Picks to your inbox every week for free. Just sign Australia’s wholesale gas price averaged $5.58
up here. per mmBtu in 2019, according to the IGU’s Whole-
Crude prices regained ground last week and the sale Gas Price Survey 2020. The survey of 53 coun-
trend continued into this week, with front-month tries showed that Australia’s price was around 40%
contracts for WTI and Brent closing at $40.63 and less than the Asia-Pacific’s average wholesale price,
$43.10 per barrel respectively on July 6. while it was just under 30% cheaper than the Asian
The recovery has been driven by economies region’s average wholesale price.
reopening and fuel consumption recovering to The IGU’s survey results showed that Taiwan,
normal levels, supported by OPEC+’s sacrificial South Korea and Japan paid the highest wholesale
cuts. Most of the oil cartel’s members are keeping gas price at or more than $10 per mmBtu, while
to their agreed quotas, and they have maintained China paid the sixth highest price.
their resolve. Australia ranked 18th overall in terms of
However, a second wave of coronavirus prices, with the lowest to be found in countries
(COVID-19) infections is now sweeping across with highly regulated markets where produc-
much of the world, with daily new confirmed ers sold gas below the cost of production and
cases surging beyond 200,000 per day. Oil mar- transportation.
kets are starting to brace for another steep fall in oil The Australian Petroleum Production and
demand, and OPEC+ seems unlikely to counter Exploration Association (APPEA) has seized on
this by extending its record deep cuts beyond July. the report.

P6 www. NEWSBASE .com Week 27 08•July•2020