LNG in transition-II: About supply surge and price drops
While Chinese LNG demand growth has staved off any fall in LNG spot prices in 2017, it is unclear how long this can provide a back stop for the continuing increase in LNG supply. 8The first real test of the LNG market’s ability to absorb the expected 2018 surge in output is likely to come in the coming months, following the ramp up of a number of supply projects 8But previous prognostications of a severely distressed LNG market in 2018 now seem less likely to be proven right, given the experience of 2016 and 2017. 8Indeed, it now also seems possible that 2018 may pass without any dramatic price drops, and without US capacity being shut in – which will be a key indicator of an over-supplied market. 8If this alternative scenario comes to pass, it will be a really remarkable result, showing the flexibility of the markets to absorb new supply. Click on Reports for more.