SINGAPORE – Volumes of liquefied natural gas (LNG) stored at sea have increased on an annual basis this month, driven by more vessels in Asia amid high inventories and slow spot demand in Japan, China and South Korea, analysts say.
Additional supplies of the super-chilled fuel could further weigh on Asian spot prices, providing some relief ahead of summer when demand is expected to rise.
Global floating inventories of the super-chilled fuel were at 0.55 million tons on April 20, showed data from analytics firm Kpler, up 0.24 million tons from the same time last year.
“There are currently more floating volumes on a global level and the increase is coming out of Asia… Reflecting tepid demand from major consumers Japan, China, and South Korea,” said Kpler LNG analyst Ana Subasic.
The number of vessels around Europe have dropped to average levels after operations at French terminals resumed following strikes, Subasic added.
“Both regions have now exited what was a mild winter of 2022-2023 with higher-than-average gas stock levels for the time of the year, which will account for limited demand growth.”
Bank of America said in an April 17 research note that floating storage levels are at or above a five-year seasonal high, “putting the market in a precarious spot ahead of summer build season.”
Asian prices have been pressured by weak spot demand and high inventories, shedding nearly 60 percent this year to $12 per million British thermal units (mmBtu).
According to Japan’s Ministry of Economy, Trade and Industry, LNG inventories of major power utilities stood at 2.42 million tons as of April 16. – Reuters
