09-24-2015, 06:27 PM
Hi jft,
I can only go by gut feeling but there appear to be an increasing number of reports of contracted LNG being resold on the spot market by the original buyer as their demand has decreased, or mainly their expected rise in demand has not been as great as they expected. This is what has currently pushed the spot price so low.
This is why I believe there will be a push in the future for customers to want a higher part of their LNG requirement to be spot market related .... just so they don't get caught in this sort of predicament.
We should not regard this as a bad thing in itself, because I also suspect that the spot market price of LNG will then be a floating supply and can easily demand a premium in price compared to contracted price because of its flexibility.
Obviously I am just speculating, but it will be interesting to see if this does come to pass.
I can only go by gut feeling but there appear to be an increasing number of reports of contracted LNG being resold on the spot market by the original buyer as their demand has decreased, or mainly their expected rise in demand has not been as great as they expected. This is what has currently pushed the spot price so low.
This is why I believe there will be a push in the future for customers to want a higher part of their LNG requirement to be spot market related .... just so they don't get caught in this sort of predicament.
We should not regard this as a bad thing in itself, because I also suspect that the spot market price of LNG will then be a floating supply and can easily demand a premium in price compared to contracted price because of its flexibility.
Obviously I am just speculating, but it will be interesting to see if this does come to pass.