Reuters is reporting that Vitol’s head of LNG trading, Pablo Galante Escobar, has gone on record stating that the short term prospects for LNG business are ‘bleak’. Escobar’s recent address to the FT Commodities Global Summit in Switzerland commented on the heavily oversupplied state of the market and the potential for supply shutdowns.
Oversupply leading to declines in Asian LNG spot prices has recently made Europe a top LNG export destination. As Escobar described, in his address, LNG shipments from the Middle East and Africa are not finding homes in Pakistan, Bangladesh or China. As a result, they are being redirected to Europe instead. Indeed, Reuters has reported that many Asian companies, notably South Korea’s KOGAS and China’s PetroChina, having been re-selling LNG cargoes, imported from the US and Russia, to Europe in recent months.
The latest estimates show that Asian LNG spot prices are now at a nearly three-year low (US$4.30 per million Btu). Moreover, it has been stated that prices are only approximately US$1 per million Btu above levels where supply shutdowns might be considered.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/28032019/vitol-expecting-shutdowns-in-response-to-recent-supply-glut/