Lucky that the US was cool this summer, and that Charley missed the GOM energy complex, could have been much, much worse.
Reuters
Sizzling summer spurs Asia oil, gas use for power
Friday August 13, 6:30 am ET
By Park Sung-woo
SEOUL, Aug 13 (Reuters) - Sweltering summer weather in China, Japan and South Korea, are driving up fuel demand from power utilities for air conditioning in Asia's top energy importers.
The heatwave, with temperatures rising above 35 Celsius (95 Fahrenheit), comes at a time when global oil prices are hovering at record highs, putting a strain on the Northeast Asian economies that import a large part, if not all, their fuel needs.
U.S. oil prices hit $45.75 a barrel this week, the highest in the 21-year history of the New York Mercantile Exchange.
"Rising fuel demand due to hot weather poses a big burden on the economy, coupled with rising oil prices," said Choi Ho-sang, an economist with Samsung Economic Research Institute in Seoul.
Japan and South Korea import virtually all their oil and gas requirements. China has to buy about 40 percent of its oil needs, which are forecast to grow by 15 percent this year.
In South Korea, Korea Gas Corp. (KOGAS) (KSE:036460.KS - News), the world's single-largest buyer of liquefied natural gas (LNG), said earlier this week natural gas sales jumped by 35 percent in July versus a year ago to 1.29 million tonnes.
KOGAS said sales to power utilities, mostly units of state-controlled Korea Electric Power Corp.(KSE:015760.KS - News), soared by 62 percent from a year earlier.
Sales look set to be high for August with temperatures in Seoul, where about a third of South Korea's 48-million population live, surpassed 36 Celsius earlier this week, the highest in 10 years, the Korea Meteorological Administration said.
In Tokyo, peak power demand approached the highest levels in three years close to 64 million kilowatts at the end of July as temperatures hit 39.5 Celsius (103 Fahrenheit), the hottest on record for the area.
NUCLEAR OUTAGE TO BOOST OIL USE
Temperatures in the Japanese capital have been above 30 Celcius for 39 days, the longest period at that level since 1995, the Meteorological Agency said.
"Daily peak demand has reached record highs in most areas in Japan thanks to the heatwave. Utilities are happy with increasing power sales rather than grieving over high oil prices," said Masanori Maruo, analyst at Deutsche Securities.
Tokyo Electric Power Co. (TEPCO) (Tokyo:9501.T - News), Japan's biggest utility, has ramped up forecasts for its fuel oil and crude needs by 27 percent to 3.8 million kilolitres for the year ending March 31, 2005, from a previous estimate of 3.0 million.
Japanese utilities' demand for oil will also be boosted when Kansai Electric Power Co. (Tokyo:9503.T - News) restarts its moth-balled oil-burning power generating units next week as it shuts nuclear units for safety checks.
The checks come after four workers were killed by super-heated steam from a ruptured pipe. The thermal units will use low sulphur fuel oil and direct-burning crudes such as Indonesian Minas and Duri grades.
Nuclear power plant closures often lead to higher operating rates at gas or oil-fired power plants.
China, the world's second-biggest oil consumer, is facing its worst power shortage in decades with brownouts in two-thirds of provinces and regions. Baking weather is exacerbating the problem.
Many businesses have bought electricity generating units to reduce reliance on the national grid, one of the factors spurring China's oil demand this year.
Temperatures in the country's financial hub of Shanghai have hit 35 Celsius for the last three weeks.
The meteorological bureau has forecast some parts of east China, such as Zhejiang province, could see thermometers reach 40 Celsius this week, and warned companies to conserve power. (Additional reporting by Ikuko Kao and Jiwon Chung in Tokyo and Godwin Chellam in Shanghai) (Editing by Tanya Pang and Ramthan Hussain; |
