LNG: changing market (file image/pixabay)
Liquified natural gas (LNG) tankers are sticking at anchorage offshore Singapore as traders assess profit potential in a contango market.
A higher future price makes floating storage a worthwhile play despite the extra costs involved, a behaviour with roots in the oil markets, according to regional business news provider the Business Times.
LNG tankers currently stationed off Singapore will await movement in the market, such as a northern hemisphere cold snap, before deciding when to shift their cargoes.
Traditionally, LNG has been a stable market with the spot price allocated a minor role.
But the emergence of increased liquidity in the LNG market, which has in part been aided by the potential demand for LNG from shipping, has turned it into the fastest growing fossil fuel, according to the report.