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Falling LNG Prices Curb Fuel Oil Utility Demand in Asia


Falling LNG prices are curbing utility demand for fuel oil in Asia according to Energy Aspects. The price decline is making natural gas competitive with both low and high-sulfur fuel oil for power generation particularly in Northeast Asia.

  • Japan’s fuel oil imports slowed by 0.11mb/d y/y over March–May as it turns to more attractive LNG.
  • Japan’s Jera also decommissioned 6 oil-fired power plants since end-March and is bringing more gas and coal generation online in 2023–24 suggesting a structural shift away from liquids burn in the country.
  • Import volumes of dirty products to Bangladesh have fallen by 50kb/d y/y in May with cheaper LNG backing fuel oil out of the power stack.

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