News

Dozens of ships carrying LNG linger around Europe’s coast | Oil and Gas News

The tankers are carrying a total of $2 billion worth of natural gas and slowly circling northwest Europe and the Iberian peninsula.

More than 30 liquefied natural gas (LNG) tankers are idling just off the coasts of Europe, Financial Times reported, as traders are holding the market price higher.

According to shipping analytics firm Vortexa, the ships are carrying a total of $2 billion worth of LNG and are traveling slowly around Northwest Europe and the Iberian Peninsula.

Felix Booth, head of LNG at Vortexa, told the newspaper: “LNG vessels have been lined up outside Europe’s LNG receiving terminals, pursuing what they expect is the premium market for this LNG. “.

“Currently, these ships have an incentive to hold positions,” he said, predicting that colder weather will increase energy demand and in turn drive up prices.

Another 30 ships are sailing through the Atlantic and are expected to join the tankers before winter, data from Vortexa shows.

LNG carriers in European waters have doubled in the past two months, as European countries fill their storage tanks to near their pre-winter limit.

In response to Western sanctions for its invasion of Ukraine, Russia has reduced gas supplies to several European countries.

In turn, these countries bought LNG as a replacement, but unreasonably warm temperatures have led to a reduction in heating demand, which in turn has kept stockpiles full and prices dropped.

Status ‘contango’

Natural gas prices in Europe have fallen back from their August highs, when they topped 346 euros ($343) per megawatt-hour.

But traders keeping their tankers offshore are counting on prices to rise in the coming months, as colder weather increases demand for heating, releasing gas from storage.

This has resulted in the market being in a state of “stress” where futures delivery prices are trading higher than immediate delivery prices, the FT said.

A similar situation regarding the oil industry occurred during the height of the coronavirus pandemic, when an excess of crude oil resulted in traders keeping their oil on board as a floating storage, Wait for the price to rise again.



Source by [author_name]

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button