By Abhishek Rohatgi, BloombergNEF
Oversupply in the global LNG market is likely to start in the second quarter 2019 and continue till first quarter 2020 as the structural demand growth – demand based on current LNG prices and 30-year average weather – is going to be lower than the rise in LNG supply over the same period.
Oversupply will peak in 3Q 2019 as high storage inventories limit Europe's capacity to absorb surplus LNG. Europe had 16 million metric tons more gas in its storage facilities in April 2019 than a year earlier due to the mild winter. Counter-seasonal importers in Latin America and Middle East are not expected to absorb excess supply in the period. Oversupply will likely be diminishing by the first quarter of 2020 as winter intensifies in North Asia and Europe. European demand will bounce back for both winter heating and displacing storage.
Quarterly LNG demand versus supply capacity
