The much-anticipated LNG oversupply has finally materialised. With 38 Mt of new LNG supply this year, there was always going to be too much for the market to absorb. And with Asian LNG demand growth slowing, excess LNG has flooded Northwest Europe and prices have crashed, dragging Asian LNG prices down too. With European hub prices now trading below US$3.5/mmbtu, the European gas market is finely balanced making the risk of US LNG under-utilisation a reality – a risk that will extend to 2020. Post-2020, the market will change quickly. A lack of LNG investment decisions from 2015-18 means there will be limited supply growth over 2021-24. Combined with rising demand in Asia, this will result in lower LNG imports to Europe. And with declining European domestic production, the requirement for Russian pipeline imports will rise towards 200 bcma in 2023/24, supporting higher prices. The price recovery phase will be brief, before a new wave of supply sets off the next cycle from 2024/25.