Gone Are the Days of Easy Money in Global Natural Gas Trades - Bloomberg:
The golden age of trading in the world’s natural gas market has ended, and it was bound to happen even before the coronavirus struck.
Two warm winters in a row in addition to the health crisis have gutted demand for the fuel used for everything from home heating to power generation. That’s left inventories brimming during a season when they’re usually drained.
A decade ago, the industry was still developing. That kept hefty premiums for shipping liquefied natural gas by tanker to places such as Asia far from pipeline networks. These days, LNG has grown into a global industry allowing gas to flow freely around the world. That and the demand slump is gutting the margins on once-lucrative shipping routes.
“I joined LNG when there was a $3 dollar margin” on every million British thermal unit of gas shipped, Sarah Behbehani, a senior vice president of LNG at Jera Global Markets who has two decades of experience in energy trading, said in February when she predicted the worst year ever for the fuel. “Now we scramble for 2 cents.”
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An LNG tanker sails past a container terminal as it arrives in Yokohama.
Photographer: Tomohiro Ohsumi/Bloomberg |
The golden age of trading in the world’s natural gas market has ended, and it was bound to happen even before the coronavirus struck.
Two warm winters in a row in addition to the health crisis have gutted demand for the fuel used for everything from home heating to power generation. That’s left inventories brimming during a season when they’re usually drained.
A decade ago, the industry was still developing. That kept hefty premiums for shipping liquefied natural gas by tanker to places such as Asia far from pipeline networks. These days, LNG has grown into a global industry allowing gas to flow freely around the world. That and the demand slump is gutting the margins on once-lucrative shipping routes.
“I joined LNG when there was a $3 dollar margin” on every million British thermal unit of gas shipped, Sarah Behbehani, a senior vice president of LNG at Jera Global Markets who has two decades of experience in energy trading, said in February when she predicted the worst year ever for the fuel. “Now we scramble for 2 cents.”
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