Global LNG overhang is not done yet
Gas prices may struggle to move significantly higher in 2020, despite a recent bounce
Rising gas prices and surging freight encouraged predictions that LNG’s bear run is over in the latter months of 2019. Even long-dormant US Henry Hub prices sprung to life on forecasts of colder-than-normal November weather. However, while seasonal gas demand recovery is likely, there is little sign short-term demand growth can fully absorb substantial new LNG supply due from the ramp-up of 2019 start-ups and new projects due in 2020. Moreover, weak year-to-date demand in 2019 has allowed consumer market inventory to build ahead of peak winter demand. So, while gas prices may strengthen seasonally, a step-change higher currently looks unlikely. Freight jump LNG freight rates have also surg
Also in this section
9 May 2024
Pipeline boosts Canada’s oil industry by widening its export options, making it less reliant on US market and bringing Asia into the mix
8 May 2024
Despite Australia’s first import terminal nearing completion, the prospect of additional regasification projects is far from certain
7 May 2024
Ample stocks and a soft demand outlook will limit how much LNG Europe can import this year