On the surface, it looks like yet another example of Warren Buffett doing Warren Buffett things.
Brent crude is down almost 40 per cent from the middle of last year, while LNG prices have crashed from record highs of about $US70 per British thermal unit last August to $US12 today.the Houston-based Occidental Petroleum Although we strongly doubt that the billionaire is thinking too much about developments in Australia’s east coast gas market, it is notable that his LNG deal came just hours before the official start of Australia’s new mandatory gas code, which seeks to put a cap on wholesale gas prices along the east coast.
While Asian LNG prices have tumbled over the past 12 months as fears about Russian supply interruptions have subsided and the market readies for a wave of new supply to come online in 2025, prices remain well above long-term averages, and the medium- and longer-term outlook for LNG remains bullish.Consultancy Wood Mackenzie estimates that global LNG supply will need to increase 25 per cent by 2030 to meet demand levels. And that’s even with that new production coming on in the next two years.