- Winter Conditions Drive European Gas Storage Utilization.
- U.S.-Listed LNG Stocks Lead Gains Despite Spot Rate Declines.
- Asian LNG Shipping Companies Face Persistent Losses.
The UP World LNG Shipping Index decreased by a minute 0.40% last week. However, overall, it has been relatively stable since November. The index is noteworthy considering that the spot LNG tanker rates are still moving downwards and the general lull in winter prospects. Still, exceptionally cold winter has pushed for European gas storage, making the trend mixed, reports LNG Shipping Stocks.
Market Comparison: UPI and S&P 500
The UPI, which monitors listed LNG shipping companies, closed last week at 163.24 points, down by 0.66 points. The S&P 500, on the other hand, showed a strong growth of 2.91% over the same period. The stability of the UPI has been mainly driven by the performance of U.S.-listed LNG shipping companies, while Asian companies have weighed negatively on the index.
Impact on the UPI
The LNG market has experienced an unusual decline in spot rates during what is normally a period of high demand. However, the severity of the winter season has prompted significant utilization of European gas storage, somewhat mitigating the pessimistic market outlook.
Shining Performers in a Mixed Market
Among the UPI constituents, New Fortress Energy (NFE) led the way with a stunning 12.3% gain that marked a bounce back from a tough second half of the year. Excelerate Energy (EE) also performed well with an 8.7% gain, finally breaking out of its previous sideways trading trend. Chevron gained for a fourth week straight as it boosted shares by 5.4 per cent to a two-year high before results. Nakilat momentum improved 3.5%, partly recovering the loss from this year’s half so far.
Shell also posted a 2.7% gain, back into its old trading range, while Capital Clean Energy Carriers rose 2.3%, suggesting a breakout. Korea’s SM KLC was the only Asian UPI constituent to advance, up a modest 0.9%.
Declines Among Asian Stocks and Other Constituents
Asian equities also drove much of the UPI decline. “K” Line lost 5.2% to test the bottom of its trading range, and Dynagas LNG Partners dropped 5.2% for its second consecutive week of declines. Mitsui O.S.K. Lines and NYK Line also tested important support levels with declines of 4.8% and 4.3%, respectively.
Flex LNG, on the other hand, registered a 3.4% correction, pulling back after a three-week rally but is still holding firmly above the $25 mark. Tsakos Energy Navigation reversed the three-week advance of 2.5%, whereas MISC slumped by 1.8%, testing all the long-term support levels laid down in preceding years.
Going forward: Cautious optimism at the helm
The long-term prospects of the LNG shipping market are still positive. This is despite the current short-term opportunity, instead helped by management-driven initiatives, situational growth opportunities, and more notably, new long-term contracts that will most likely influence the market to get back on track.
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Source: LNG Shipping Stocks
