• 4 minutes Permian in for Prosperous and Bright Future
  • 7 minutes Amount of Oil Usage in the United States
  • 10 minutes America Could Go Fully Electric Right Now
  • 23 mins Something wicked this way comes
  • 35 mins Why NG falling n crude up?
  • 6 hours US after 4 more years of Trump?
  • 1 day Famine, Economic Collapse of China on the Horizon?
  • 2 days Oil giants partner with environmental group to track Permian Basin's methane emissions
  • 2 days .
  • 23 hours Top HHS official takes leave of absence after Facebook rant about CDC conspiracies
  • 1 day Nord Stream 2 Halt Possible Over Navalny Poisoning
  • 3 days The Perfect Solution To Remove Conflict Problems In The South China East Asia Sea
  • 1 day .
U.S. Oil Exports Continue To Decline

U.S. Oil Exports Continue To Decline

Declining global oil and fuel…

The Electrification Of UK Offshore Oil & Gas

The Electrification Of UK Offshore Oil & Gas

Electrification of oil and gas…

LNG Producers Dump Spot Cargoes On Oversupplied Market

Amid plunging gas demand, LNG producers are under pressure to dump their cargoes on the spot market, further depressing already low prices, Reuters reports, citing commodity trading sources.

“We’re seeing more sell tenders these days due to a combination of factors like coronavirus and DQT, but this also means that when demand rebounds, buyers will return to the market to seek spot cargoes,” one source told the news agency, referring to the downward quantity tolerance stipulation typical of take-or-pay contracts for natural gas that allows the buyer to buy less than agreed without consequence.

In the present situation of supply and demand, many LNG buyers in northern Asia are invoking the DQT clause, the sources said.

The search for buyers intensified after Indian LNG importers, chief among them Petronet, earlier this month issued force majeure notices to suppliers following the start of a 21-day nationwide lockdown to stem the spread of the Covid-19 epidemic on the subcontinent.

The force majeure was prompted by the closure of all non-essential businesses in one of the world’s top consumers, cutting off a buying spree that helped LNG prices tick higher as Indian LNG consumers took advantage of the low prices.

China’s largest LNG importer, PetroChina, also declared force majeure on imports earlier this month, including both LNG and pipeline gas, as the viral disease crippled demand.

Japan, the world’s largest LNG importer, while short of declaring force majeure on deliveries, has also ordered a partial lockdown that will inevitably reduce demand for the commodity.

Reuters notes that spot LNG prices in Asia slipped below $3 per mmBtu this week after last week they touched a record low of $2.70 per mmBtu. A reversal of LNG’s fortunes seems unlikely, at least in the short term, with stockpiles in Asia also high for this time of the year, discouraging buyers even at current prices.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News