- The UP World LNG Shipping Index (UPI) rose by 4.48% last week, closing at 169.33 points, while the S&P 500 declined by 0.48%. Despite recent gains, the UPI’s year-to-date performance remained nearly flat at -0.08%.
- Stocks saw broad gains in a holiday-shortened week with Flex LNG leading the growth at +10.7%, followed by New Fortress Energy (+10%) and Awilco LNG (+8.3%).
- The outlook for LNG shipping stocks has shifted from negative to cautiously optimistic due to improving technical indicators, though market movements were driven by low liquidity.
- The cessation of Russian gas shipments to Europe has impacted countries unprepared for the change, though it hasn’t yet affected LNG shipping stock prices significantly.
- The long-term outlook remains positive, with expectations for actions like scrapping steam-powered vessels to strengthen the industry and the companies within the UPI.
LNG Shipping Stocks Gain in Low-Volume Trading Week
Last week, the UP World LNG Shipping Index (UPI), which tracks publicly listed LNG shipping stocks, rose by 4.48%, while the S&P 500 declined by 0.48%. Despite growth in the last two weeks, the UPI’s year-to-date performance remained nearly flat at -0.08% due to significant declines in the second half of the previous year.
LNG shipping stocks saw broad gains in a low-volume, holiday-shortened trading week. Flex LNG led with a 10.7% increase, followed by New Fortress Energy (+10%) and Awilco LNG (+8.3%). Other notable gainers included Cool Company (+7.2%), BP (+5.2%), and Shell (+4.6%).
Our outlook has shifted from negative to cautiously optimistic, with technical indicators improving. However, market movements were primarily driven by low liquidity, and whether this trend will continue remains to be seen.
End-of-Year Growth Pushes UPI Up for Second Consecutive Week
Last week, the UP World LNG Shipping Index (UPI), which tracks listed LNG shipping companies, gained 7.26 points, equivalent to 4.48%, closing at 169.33 points. The S&P 500 index lost 0.48%. The chart below illustrates the performance of both indices with weekly data.
The end of the year brought sufficient growth, and the UPI strengthened for the second week in a row. The UPI’s year-to-date performance was -0.08%, and many constituents have closed at levels similar to where the year started. The decline in the year’s second half was too substantial, and the last two or more weeks were insufficient to correct it.
Winter has arrived in the northern hemisphere, and the pressure on gas and LNG prices continues. Ukraine has stopped sending Russian gas to Europe, which only brings grief to countries that neglected to prepare. But so far, these changes have not translated into spot rate changes. However, at least some investors have taken advantage of the low share prices and the absence of most investors, pushing stock prices up significantly. The week ahead will show whether these were just swing trades or a change in attitude.
LNG Shipping Stocks Rise in Shortened Trading Week
A shortened week at the turn of the year brought global equities higher, and LNG shipping stocks were no exception. All UPI titles rose, albeit in a significantly below-average volume. However, this was due to the lower number of trading days, with, for example, the Japanese exchanges not yet open at the time of writing.
The best performer was Flex LNG (NYSE/OSE: FLNG), the only one to surpass the 10% mark, specifically rising 10.7%. New Fortress Energy (NASDAQ: NFE) is in second place among gainers, which grew 10%. Awilco LNG (OSE: ALNG) came in third with 8.3% growth. Without Friday’s decline, the gains would have been more significant for all three companies.
Cool Company (NYSE/OSE: CLCO) rose 7.2%, while BP (NYSE: BP) added 5.2%.
Smaller Gains Across Other LNG Shipping Stocks
Three companies saw growth, starting with four. These were Excelerate Energy (NASDAQ: EE) and SM Korea Line (KRX: 005880), both up 4.8%, and Shell (NYSE: SHEL), up 4.6%. EE has returned to resistance and will look to break out of it. We’ll see how it does so.
The next trio showed growth, starting with number three. Here, too, two companies had the same gain of 3.4%: Dynagas LNG Partners (NYSE: DLNG) and Tsakos Energy Navigation (NYSE: TEN), which were complemented by Golar LNG (NASDAQ: GLNG), which rose 3.8%.
Exmar Shows Small Increase Amid Low Trading Volume
Chevron (NYSE: CVX) added 2.7%, as did Japan’s “K” Line (TSE: 9107). The latter rose, in a shortened week, by 2.3%. Two other Japanese companies added 1.9% (MOL, TSE: 9104) and 1% (NYK Line, TSE: 9101). MISC (KLSE: 3816) rose 1.5%, Nakilat (QSE: QGTS) added 1%, and Capital Clean Energy Carriers (NASDAQ: CCEC) rose 0.4%. Exmar (BSE: EXM) rose 0.3%.
Our short-term outlook changed from negative to “something might be happening”. This is due to a low volume and a shortened week. The moving averages are covered, but the UPI is already above both. That’s a positive.
Our long-term view is still positive, and we expect situationally or management-driven actions, such as the scrapping of steam-powered vessels, to strengthen the industry and companies in the UPI.
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Source: LNGShippingStocks
