LNG Supply Glut to Increase in 2016

Last month, LNG cargo deliveries to the UK were up 150% compared to the same period last year, driven by a surge in spot cargoes from Qatar and Nigeria. This increase is a consequence of waning Asian demand, increased supplies from new players in the market, and a switch in strategy from the world’s biggest LNG exporter, Qatargas.

Qatargas is under pressure from a number of new players in the market, which has created a supply overhang and a subsequent fall in price. To date, Japanese imports of LNG are down 3.1% year-on-year, all due to mild winter, a cooler summer, and the restart of one nuclear reactor with more to follow. Additionally, South Korea demand is down 11.6% to date this year as they are using less gas-for-power generation and increasing coal-fired and nuclear generation.


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