Nearly 50 gas tankers are currently waiting offshore after mild weather in Europe saw the price of liquefied natural gas (LNG) fall sharply by 60%, making their cargo less valuable.
With winter approaching the vessels are reportedly holding off docking until colder weather causes demand for gas to rise again along with prices, which would see their profits soar.
Analysts at Spark Commodities expect that by waiting until December to unload, LNG suppliers will make tens-of-millions more in profit, at potentially $35mln extra per vessel.
Another issue the vessels face is a lack of storage at docks, with demand having fallen and European countries having rushed to replenish gas stocks.
Many supplies were previously urgently sent LNG to Europe upon warnings of gas shortages over the summer, according to Wood Mackenzie researchers, but these have suddenly been met with a rapid reduction in demand.
As a result, the researchers estimate that 49 Europe-bound vessels are currently parked in the ocean, out of a total of 278 worldwide.
Graham Freedman, Wood Mackenzie principal analyst commented: “LNG traders have been caught a little bit unaware. Everyone was told that Europe faces a huge shortage of gas this winter so buyers have been out securing extra cargoes, then all of sudden demand has slumped.”
Laura Page, senior LNG analyst at Kepler noted: “We've seen many import facilities run at full capacity this year as demand to import LNG has been high due to Europe's diversification away from Russian gas. As a result, there have been occasions where there is low availability of slots to unload.”
Last week, the European Commission revealed that EU gas storage was at 92% capacity.