Japan utilities eye summer oil as LNG hits records

[jpak]

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-02-22T124842Z_01_T159564_RTRUKOC_0_US-ENERGY-JAPAN-LNG.xml

TOKYO (Reuters) - Japanese utilities may fire up more oil generators to meet peak summer demand if spot liquefied natural gas (LNG) prices, inflated by an unusually frigid winter and European outages, stay near record highs.

Soaring demand this winter has forced power firms in the world's third-biggest energy consumer to increase oil purchases to the highest level in three years, with further spring buying seen as utilities restore depleted natural gas and oil stocks.

Japanese power firms often turn to oil after operating other units to their limits to meet peak winter and summer demand.

Buying oil instead of LNG for purely economic reasons would be unusual, but with oil prices hovering at $62 a barrel, it makes sense, analysts said.

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