Looking at the December quarter of 2015, EnergyQuest’s first quarterly review for 2016 revealed that Australia’s total trade deficit across all goods and commodities was a seasonally adjusted $3.54 billion compared with only $786 million a year earlier in December 2014.
However, an assessment of the latest Australian trade statistics by EnergyQuest revealed that in December, despite the 40% slump in global oil prices, the value of Australian LNG and other petroleum exports just about completely offset the huge cost of importing crude oil, petrol and other petroleum products.
The LNG boom means the nation has been able to offset the rapid deterioration in the country’s balance of payments, improving it by around $500 million in December alone.
“This good outcome reflects the growth in Australian LNG exports,” EnergyQuest CEO Dr Graeme Bethune, said today.
“Australia’s established LNG projects – Woodside’s North West Shelf and Pluto and ConocoPhillips’ Darwin LNG - have been performing exceptionally well. Now the three new Queensland projects have joined that total LNG production flow.”
Australian LNG production surged 48% for the quarter from the same time in 2014 to 9.1 million tonnes.
The petroleum deficit measures the difference in value between Australia’s petroleum imports and exports.
Petroleum products and oil are the nation’s third and fourth biggest imports, but while the domestic gas market is easily producing enough gas, most of which is sent off internationally, in terms of oil, Australia only produces about half the amount it needs, and it ships much of that to places such as Singapore for refining.
Dr Bethune said the cost of petroleum imports fell by 17% from $2.56 billion to $2.14 billion from December 2014 to December 2015, half the fall in the Australian dollar oil price because of the fact refinery margins are now captured in Singapore, imports are increasing and Australia’s refinery fleet is shrinking.
And because the price of LNG is set by longer-term contracts, exports were protected from the oil price fall.
“The end result was that the value of Australia’s petroleum exports held up well, despite the 33% fall in the oil price,” Dr Bethune said.
“Even though the fall in the cost of petroleum imports was less than the fall in the oil price, the strong export performance was sufficient to eliminate the petroleum deficit.”
