Bangladesh's coal turn a bad sign for LNG

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Hello Power Up readers,

Oil prices are firmer again on Thursday after China suspended oil product exports for October to bolster domestic stocks. The move will likely further crimp already-tight global fuel markets, and comes as China begins the Golden Week holiday, one of the busiest travel periods in the country for the year. More on this developing story below.  

Crude oil market participants are also looking for greater clarity on tanker traffic out of the Gulf and the progress of any peace talks between the US and Iran. Traders are also eyeing the upcoming OPEC+ meeting on Sunday, although the oil producer gang is expected to keep output targets steady for November.

The lingering disruptions to global oil and fuel flows caused by the conflict with Iran have spurred oil analysts to raise their average Brent crude oil price forecasts for 2026 to $89.05 a barrel, although note that there are signs of a gradual improvement in export flows from the Middle East. 

On the natural gas front, market focus remains largely on  Europe's inventory levels, which remain well below the long-term average for this time of year and are expected to be replenished before winter kicks in.

That should boost US LNG sales over the near term, although exporters will find cause for concern about their longer-term prospects following a disappointing power mix milestone in Bangladesh, which was previously considered a high potential growth market for LNG. 

I dig into that more deeply below, but first up, here are some key stories and columns from the Reuters teams from the last few days.

As always, feel free to contact me at gavin.maguire@reuters.com or connect with me on LinkedIn with any questions or thoughts.

Bangladesh should be one of the global LNG industry's success stories, but instead is a warning sign.

Few countries better fit the profile of a future liquefied natural gas growth market. Electricity demand is rising, domestic gas reserves are falling, and policymakers have invested heavily in LNG import infrastructure to bridge the gap.

For years, those trends helped make Bangladesh a veritable poster child among LNG bulls who argued that rapidly growing Asian economies would underpin LNG demand growth for decades.

Instead, Bangladesh has crossed a milestone that should give LNG investors pause.

Coal-fired electricity generation overtook gas-fired generation for the first time this summer, data from Ember shows, marking a dramatic shift for a country where gas previously accounted for over 90% of electricity supplies.

Coal-fired electricity output was 3.92 terawatt hours (TWh) in July, compared to 3.66 TWh of generation from gas-fired plants.

That flip is significant because it has implications for gas use trends across the broader developing world, where there are further signs of gas losing generation shares in power mixes.

Link to the full column below.