LNG markets show when supplies are tight, position visibility is crucial

Cold weather in Asia has resulted in increased LNG demand and more shipments to the area, leading to less availability in Europe and elsewhere. Demand on European gas stores has been high, although not unusually so, meaning that there is less flexibility in the market right now. This lack of flexibility has led to high spot prices and volatility across regions, and although spot demand is high in Europe, spot liquidity is currently concentrated in Asia. And given that vessels delivering to Asia in February may not be ready to pick up cargo in early March, European stocks may remain low into the warmer weather. With fewer options available, LNG producers, traders and buyers need access to more information than ever to ensure they are making the right decisions. And whilst this particular squeeze primarily affects the energy markets, its lessons are relevant for all commodity traders and buyers. Position visibility is always important, but when flexibility is limited, the better real-time position visibility you have, the more flexibility you can create. How position visibility helps There are a wide range of options for each LNG contract that can cumulatively have a significant impact on deal profitability. Without even mentioning… continue reading

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Source: CTRM Center

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