Buyers continued to cancel liquefied natural gas (LNG) cargoes for September loading, market sources said. However, the cancelled September shipments are fewer than August and July, the sources noted. According to them, at least 26 shipments to be loaded at US LNG export facilities in September were cancelled, compared to 45 and 40 for July and August loading, respectively.
The sources added that about 15 of cancelled cargoes are tied to Cheniere Energy’s LNG terminals in Louisiana and Texas. Meanwhile, at least seven cancelled September shipments are supposed to be loaded from Freeport LNG terminal in Texas. Buyers began cancelling shipments since April due to low international prices and demand caused by the coronavirus pandemic.
The slowdown in cargo cancellation is attributed to a forecast that demand will improve during the fall and winter. Despite the slowdown in cargo cancellation, the number still suggests that the global LNG market remains oversupplied. Two of the sources said that the cancellations for September shipments were primarily caused by weak prices in Europe, where gas storage tanks were near to the brim.
The slowdown is also attributed to an expectation that the LNG trade will pick up in late fall and early winter, especially from the European markets. However, US LNG exporters will still require demand from the Asian markets, which the outlook remains lacklustre. The sources noted that demand in India was seen increasing slightly, which could help sellers to find buyers.
