TradeWinds: Floating storage prospects set to rise for LNG carriers in flooded supply market

8 April 2020

Kristen Holmquist, Poten’s manager for short-term forecasting, said the LNG charter market remains “incredibly volatile”. She said LNG floating storage is expected to rise, sending charter rates higher, if cargoes continue to flood into the market.

But, she added, the situation could quickly reverse if producers decide to cancel cargoes or shut-in production.

Another LNG analyst said the market might see an episode of “defensive floating storage” of LNG in the coming months.

But he warned prevailing low gas prices are acting as an “invisible force” and that any attempt to raise charter rates on the back of a tightening shipping market will likely fail, as it will only make producers’ decisions on supply cuts simpler.

Poten has forecast the market could see an excess of 19m tonnes of LNG this year on the demand fallout from the Covid-19 pandemic.

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