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While everyone is understandably watching the meltdown in the crude oil market, the global market for natural gas is also cratering. At least 20 cargoes of U.S. liquefied natural gas (LNG) have been cancelled by buyers in Asia and Europe, according to Reuters . The global pandemic and the unfolding economic crisis have slashed demand for gas worldwide. Cheniere Energy, one of the main exporters of U.S. LNG, has seen an estimated 10 cargoes cancelled by buyers halfway around the world, Reuters said. The price for LNG in Asia was already crashing before the pandemic, owing to a substantial increase in supply last year. Prices for LNG in Asia for June delivery have recently traded at $2/MMBtu, only slightly higher than Henry Hub prices in the U.S. As recently as October, LNG prices in Asia traded at just under $7/MMBtu. The problem for American gas exporters is that after factoring in the cost of liquefaction and transportation, gas breakeven prices for delivering to Asia are around $5.56/MMBtu , according to Reuters. But prices are trading at less than half of those levels. Gas exports tend to be conducted under rigid contracts, but cargoes are now facing cancellation. “The financial […]

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