Reuters is reporting that LNG suppliers have been flooding the LNG spot market with excess cargoes as global demand continues to dwindle.
The lockdowns and strict travel restrictions implemented to help slow the spread of the coronavirus outbreak worldwide have disrupted industrial output, subsequently impacting on LNG demand. The largest drop offs in LNG demand have been recorded in countries such as: India, Italy and Spain.
This latest LNG glut is pushing Asian LNG spot prices back towards the record low that was recorded in February (i.e. when Chinese demand collapsed during the initial outbreak of the coronavirus). Prior to the events that led to the record low, prices were already at seasonal lows due to the impact of the ongoing trade war between the US and China, in addition to a warm winter.
As LNG spot prices suffer in Asia with gas demand plummeting at double-digit rates, according to IHS Markit, LNG imports to Europe will experience a significant boost. Indeed, estimates suggest that total LNG deliveries to the continent will reach approximately 11 million t (a 14% increase from previous record set in December 2019).
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/30032020/lng-spot-market-flooded-with-excess-cargoes/