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🔥 Europe vs Asia: the battle for heat⠀
👉 Today published fresh reports of the IEA and OPEC. Details of the oil market are, of course, interesting, but the global problem of the redistribution of energy resources is much more complicated. Recall: Europe has embarked on a policy of abandoning Russian energy carriers and is trying to form a serious reserve of natural gas and
coal. But its chance to stay warm this coming winter depends on the three Asian countries.
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Japan, South Korea and China − the largest importers of LNG and
coal − have the same peak energy demand season as Europe. The weather is a constant source of force majeure, especially for Japan and Korea. Energy-intensive
coal, which is used by economical Asians, is in speculative demand and is supplied only under long-term contracts.
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China is in a more comfortable situation. Record
coal production, combined with low demand for electricity, has led to the fact that the reserves of this raw material have already reached a historical maximum.
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Europe is actively reducing gas consumption and increasing LNG imports to fill storage facilities, as well as restarting
coal-fired power plants. Global competition for fuel is complicated by the Russia-Ukraine conflict. European Commission will introduce a complete ban on Russian
coal from next week, there is no full-fledged replacement for these energy resources yet.
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The disruption of trade flows causes prices to rise wildly. Smaller countries such as Bangladesh and Pakistan are already suffering from daily power outages because they cannot afford to buy the required amount of energy at current prices.
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It's too early to make predictions, but if there is a very cold winter, Asia will need additional volumes and a fierce market war with European consumers is inevitable.
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Now it is important to seize the moment when Japan and South Korea start building up their gas reserves. Then a new wave of price growth will appear on the LNG spot market, and you and I will have a chance to make good money.
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Profits to y’all!