LNG Cargo Diversions See Upward Trend on Oscillating Arbitrage: Platts

LNG cargo diversions have seen an upward trend with at least 40 cargoes diverted in May and June each, according to Platts.

• This was because the arbitrage window flickered between open and shut arbitrage.
• The diversions could be led by the unbalanced demand between Asian and European markets. Demand has seen an uptick from Asia, where traders were expecting above-average demand in North Asia during the summer.
• European demand, however, remains lacklustre on healthy storage and milder weather.
• Platts noted that diversions varied widely, involving routes such as South America to Europe, within Europe, and within specific countries.
• While the arbitrage economics have been volatile, US sellers continue to prefer the Asian market amid stronger netbacks.