Oil prices remain stable thanks to the strong U.S. economy and signs of tightening oil oversupply in the near future.
The growth of the U.S. economy has supported the oil market and contributed to lifting global stock markets, although trade pressure still exists.
MAIN CONTENT
Brent oil prices exceed $69/barrel, WTI stabilizes near $67/barrel thanks to signs of a tightening oil market.
U.S. tariff policies are driving Asia to increase LNG imports from the U.S.
Long-term LNG contracts may limit the transition to renewable energy in Asia.
What new developments are there in oil prices amidst the U.S. economy?
According to the U.S. Energy Information Administration (EIA) report in April 2024, global oil prices remain stable thanks to strong U.S. economic data, helping to reduce concerns about potential growth slowdown. Brent crude rose above $69/barrel, while West Texas Intermediate held around $67. The market is currently in a backwardation state, indicating that current oil supply is quite limited despite OPEC+ having loosened production quotas this year.
Oil prices 'reflect a tightening supply and a strong U.S. economy,' according to analysis by Sarah Emerson, CEO at ESAI Energy, an energy market research firm, 2024.
Sarah Emerson, CEO ESAI Energy, 2024
How have U.S. tariff policies impacted LNG imports in Asia?
International energy experts state that under the impact of U.S. tariffs, Asian countries are increasing LNG imports from the U.S. to reduce trade tensions. For example, Japan signed a long-term contract lasting 20 years with a U.S. company to import over 5 million tons of LNG per year, expected to start deliveries in 2030. Vietnam also stands out with agreements to build gas import centers in the U.S., demonstrating a commitment to increase purchases of U.S. gas.
'Importing LNG from the U.S. is not just a trade matter but also a national strategy to balance trade relations,' according to a representative from the Ministry of Industry and Trade of Vietnam, speaking at the Southeast Asia Energy Conference 2024.
Representative of the Ministry of Industry and Trade of Vietnam, Southeast Asia Energy Conference, 2024
What is LNG and why does Asia prioritize imports from the U.S.?
LNG is natural gas that has been cooled to a liquid form, making it easier to store and transport. It is widely used in electricity generation, cooking, and industry. With the U.S. policy promoting LNG imports recently, many Asian countries wish to diversify their energy supply instead of relying solely on the Middle East or Russia.
What impact does long-term LNG import have on the transition to renewable energy?
Experts warn that long-term LNG contracts could trap Asian countries in fossil fuel infrastructure, slowing the transition to clean energy. Indra Overland, an expert at the Norwegian Institute of International Affairs, emphasizes that building LNG infrastructure such as ports, pipelines, and gas burning equipment leads to high costs and is difficult to replace soon.
The 'take-or-pay' terms in LNG contracts require many countries to pay even if they do not fully use the gas, causing financial pressure and slowing the adoption of renewable energy solutions such as solar or wind power. For example, Pakistan has had to delay LNG imports due to rising costs while also promoting solar installations to lessen dependence on fossil fuels.
U.S. LNG Agreement Country Impact on Japan's Energy Transition 20-Year Contract, >5 million tons/year, delivery 2030 Stable supply but creates long-term burden Vietnam has signed a cooperation agreement to build an LNG import center Increasing flexibility in gas supply, but needs to balance renewable energy Pakistan Delays LNG imports due to high costs Promotes increased solar energy, reducing dependence on fossil fuels
How do analysts assess the impact of LNG on trade balance and the environment?
According to the International Energy Institute, although LNG imports from the U.S. have increased, the impact on the overall trade balance remains limited due to the volume not being large enough. Countries may sign contracts as a means of creating trade goodwill rather than actually changing the balance. However, long-term commitments to import LNG pose many risks to clean energy strategies and global emissions control.
Frequently Asked Questions
What are the current prices of Brent and WTI oil?
Brent crude surpassed $69/barrel, while WTI remained near $67/barrel according to the April 2024 report.
What is LNG and why is Asia increasing imports from the U.S.?
LNG is liquefied natural gas, easy to transport, and is prioritized for import by Asia from the U.S. to diversify supply and reduce trade tensions.
What risks do long-term LNG contracts pose for renewable energy?
Long-term contracts may slow the transition to clean energy due to being stuck in fossil fuel infrastructure and fixed payment costs.
Which countries have changed their LNG import policies due to costs?
Pakistan has delayed LNG imports and increased solar energy installations to reduce costs and dependence on fossil fuels.
What is the impact of U.S. LNG imports on the trade balance?
Many experts believe this only helps improve trade goodwill, not enough to significantly impact the overall trade balance.
Source: https://tintucbitcoin.com/dau-tang-chau-a-chuyen-sang-lng-my/
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