Jaysus, I didn't realise the LNG folk were being so fucking dumb.

The long-term natural gas outlook remains as tenuous as it has been ever since the sector suffered two consecutive seasons of warmer-than-normal winters. Like the oil sector, natural gas producers are largely going on with business as usual with nobody willing to be the first to blink.

Indeed, the sector is sitting on even shakier grounds because it lacks a strong organization like OPEC to try and maintain some semblance of order with the natural gas equivalent--the Gas Exporting Countries Forum (GECF)--usually preferring to take a hands-off approach.

Sure, a handful of producers usually dance to their own tunes, adjusting production according to the prevailing market dynamics. For instance, Norway’s Equinor is able to optimize its domestic gas output by deferring production when prices dip too low.

Meanwhile, producers who do not use long-term futures contracts such as Egypt are forced to halt production when it stops making economic sense while others like Russia’s Gazprom are limited by how much their transport infrastructure can handle.

But nobody seems willing to give up market share with the three biggest producers--Australia, Qatar and the U.S.--still maintaining near-100 percent utilization rates even at these ridiculously low price levels.

Indeed, many producers are now stealing another page from the oil sector’s playbook: Storing huge amounts of the commodity in the high seas.

Bloomberg has reported that LNG floating storage clocked in at 17 late last month, but eased to 13 in April after some vessels unloaded their cargoes in India. Never mind that storing super-cooled gas for months on end is wasteful and expensive.

The “boil-off” rate is a big loss factor for stored LNG, with 0.07 percent to 0.15 percent on average evaporating from LNG tankers every day. But with land storage facilities rapidly filling up, these producers are finding themselves hemmed in between a rock and a hard place.

Oil Price War Claims Another Victim | OilPrice.com