UPI Gains Momentum Amid LNG Shipping Market Dynamics

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Mfame Editor
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Last week saw positive movements in key market indices, notably the UP World LNG Shipping Index (UPI) and the S&P 500 (SPX) representing U.S. stocks.

LNG Shipping

The UPI, tracking LNG shipping companies, gained 4.26 points or 3%, closing at 146.25 points. Meanwhile, the SPX recorded a 2.24% gain. Both indices’ performance reflects the recent trends in the respective sectors, as depicted in the accompanying image.

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UPI’s Resurgence

  • After four weeks, UPI has finally started to gain momentum, mainly due to the positive effect of Q3 earnings on the market. 
  • New Fortress Energy (NASDAQ: NFE) and Excelerate Energy (NASDAQ: EE) have led the upward trend since a week ago. 
  • The announcement of Capital Product Partners LP’s (NASDAQ: CPLP) plan to transform into a corporation and focus on being a pure LNG shipper with eleven new buildings has also had a positive impact on UPI’s performance. 
  • Capital Maritime & Trading Corporation, the sponsor of CPLP, ordered the new buildings. The total acquisition price is 3.1 billion, and vessels will be delivered by 2027.

Positive Trajectory

NFE has gained the most, with an impressive increase of 9.9%, followed by CPLP, which gained 8.5%. EE came in third place with a rise of 3.8%. 

Four other constituents of UPI gained 2.x%, including Asian companies NYK Line (TSE: 9101) and MISC (KLSE: 3816), European´s Flex LNG (NYSE/OSE: FLNG) and Dynagas LNG Partners (NYSE: DLNG).

 BP (NYSE: BP) and Chevron (NYSE: CVX) have also seen gains of 1.5% and 1.1% respectively, halting their previous decline. The other five gains were lower than 1%.

Sector Dynamics

On the other hand, the decliners were led by Exmar (BSE: EXM) and Cool Company (NYSE/OSE: CLCO), which both lost 4.6%. Nakilat (QSE: QGTS) finished with a loss of 1.4%. So, the volatility is still present in the LNG shipping market.

In summary, UPI has finally halted its four-week decline and performs better than the SPX index. This optimism was primarily driven by the Q3 earnings announcements, which provided new insights into the plans of some LNG shippers. This confirms the constant positive dynamics of the sector.

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Source: LNG Shipping Stocks