Wednesday Deadline For Woodside Deal With Unions

European LNG prices rose a further 5.4% on Tuesday to trade most of the day above EUR40. They closed at EUR43 after reaching EUR44.80, a new high for the month. After rising almost 10% on Monday, gas is now up 51.6% in August due to worries that around 10% of the world’s LNG output will be impacted by industrial action in Australia. Prices remain low compared to last year though.

• On Tuesday, Woodside said that talks with Australian unions had been “constructive” and that there had been “substantive” agreements on a number of issues but it stated that it also had a duty to shareholders. Woodside chief executive O’Neill said that the response to the issue shows how “fragile” the market is.
• Unions have given Woodside until the end of business today for a settlement on pay and conditions to be made. They gave notice of strike action on the weekend and without a deal action could begin as early as September 2 including 4 hourly stoppages but have promised domestic supplies won’t be impacted.
• The ballot for Chevron workers is due tomorrow. The Electrical Trade Union has said little progress has been made in talks.
• While most of Australia’s LNG exports go to Asia there is concern in Europe that a disruption will increase competition for non-Russian output heading into the northern hemisphere winter. But Asian buyers don’t yet seem worried as they are not yet looking for other sources, according to Bloomberg. North Asian LNG prices are higher but a lot less than Europe.