Summary
The UP World LNG Shipping Index gained 2.63 points (1.22%) last week, closing at 218.45 points, while the S&P 500 gained 3.58% in its strongest week in nearly four months. The UPI rose again on slightly below-average volume, with 13 companies advancing and 8 declining, and a median change of 0.4%. Three companies posted double-digit gains and one a double-digit fall. The gas market eased slightly on geopolitical stabilisation, though extreme heat in Japan and South Korea could support Asian spot demand. Atlantic spot tanker rates fell sharply by $20,000 to $51,750/day, while the Pacific held at $71,500/day. Both Korean firms led the gains — PAN Ocean +10% and Korea Line Corporation +9.95% — while Excelerate Energy fell 11.2% following its quarterly results.
UPI & SPX
The UP World LNG Shipping Index, which tracks 21 listed LNG shipping companies, gained 2.63 points (1.22%), closing at 218.45 points, while the S&P 500 index gained 3.58%. The chart below illustrates the performance of both indices with weekly data.
Broader View
The UPI rose again, although trading volume remained slightly below average. Thirteen companies rose and eight fell, with the median price change at 0.4%. Rounding off slightly, three companies saw double-digit gains, and one saw a double-digit fall.
The situation on the gas market has eased slightly thanks to the stabilisation of the geopolitical situation. The Reuters weekly round-up quoted Rystad Energy: “Extreme heat could further support Asian spot demand, with Japan and South Korea facing a 60–70 per cent probability of above-average temperatures in August, raising the prospect of faster inventory drawdowns and additional near-term procurement,” said Rystad Energy analyst Antonia Syn.
“Buying interest has broadened despite prices holding near the $20/mmBtu mark,” she said, adding that buyers from Bangladesh, India, Thailand and Taiwan are also active in the market.
European prices remain around $18.60 per mmBtu.
Spot rates for LNG transport across the Atlantic fell by $20,000 to $51,750 per day, whilst rates for the Pacific remained at $71,500 per day, according to Spark Commodities.
Constituents
Both Korean companies saw the strongest gains. PAN Ocean (KRX: 028670) rose by 10 per cent, and Korea Line Corporation (KRX: 005880) gained 9.95 per cent. Whilst PAN Ocean rebounded to near its all-time highs following a brief dip, Korea Line Corporation attempted to break out of its sideways trend. The rise was sufficient to push the share price towards resistance, so a change in trend has not yet been confirmed.
Third was New Fortress Energy (Nasdaq: NFE), where we are accustomed to high volatility given its very low price. A move of 9.6% is therefore neither surprising nor a turning point.
Two other Asian companies gained by nearly five per cent. Mitsui O.S.K. Lines (TSE: 9104) rose by 4.95 per cent, and COSCO Shipping Energy Transportation (SS: 600026) rose by 4.92 per cent. MOL has risen for the fifth week in a row, whilst COSCO has done so for the third. MOL appears to have embarked on a new upward trend, with the red (but percentage-wise positive) candlestick from the week before last potentially representing a correction in the uptrend. If so, MOL could be set for further strong growth, which might also be reflected in this week’s above-average trading volume. COSCO is certainly not that far along yet, and this rise could still be viewed as a correction to a downtrend, with the weekly chart now having reached a downward trend line.
Nakilat (QSE: QGTS) recorded greater growth during the week than the final 3.87 per cent. Uncertainty is evident in the share price, which is hovering between the wartime price and the price from the ceasefire period.
Dynagas LNG Partners (NYSE: DLNG) rose by 3.58 per cent, although the increase during the week was even greater. In the short term, the price has remained below spring levels for the eighth week running; in the long term, it has been moving sideways practically since last spring.
Exmar (EBR: EXM) rose by 3.13 per cent, but it too is showing minimal movement and has been trading almost entirely sideways. This is due to low liquidity and the small number of tradable shares.
Golar LNG (NASDAQ: GLNG), up 2.6 per cent, is the last company to show any significant movement. However, it too has been trading sideways since May, albeit remaining below its spring highs.
Excelerate Energy (NYSE: EE) fell by 11.2 per cent, driven by the quarterly results published on Thursday. The over 13 per cent increase in the dividend was overshadowed mainly by the postponement of the launch of capacity in Iraq until the second quarter of next year. The results themselves were not bad, but the perception of “good, but not good enough” – combined with higher capital expenditure following the previous rise in the share price – weighed on the stock.
BP (NYSE: BP) fell by 8 per cent; this may be a correction following its previous rise.
ALNG (OSE: ALNG) fell by 6.19 per cent; Wednesday’s extraordinary general meeting approved the possibility of issuing up to 20 per cent new shares, although just under one per cent is earmarked as an incentive share for the CEO of ALNG Trading, with the remainder held in reserve.
Two oil and gas companies not yet mentioned, Shell and Chevron, fell by 3.78% and 5.22% respectively.
Both Chevron (NYSE: CVX) and Shell (NYSE: SHEL) are following the same pattern as BP, mentioned above. They fell after several weeks of gains, with Shell dropping below its spring highs.
Tsakos Energy Navigation (NYSE: TEN) continues to trade sideways even after a 2.44% decline. Flex LNG (NYSE: FLNG) is following a similar short-term pattern, with its price still holding above $30.
Crystal Ball
Qatar has been temporarily sidelined among the conflict’s losers due to industrial damage to its facilities, whilst US LNG exporters emerge as the clear winners. European importers were shielded from spot price increases thanks to predominantly long-term U.S. contracts. However, these contracts are not sufficient to replenish inventories for the winter, and European companies must return to the market despite Qatar’s continuing export restrictions. We expect most of the rising US gas production will flow towards Europe. New global LNG producers should also benefit from this conflict, as energy source diversification becomes more important than ever—provided importing economies remain healthy enough to absorb higher energy costs.
The outlook remains volatile, but positive in the long term. The gradual phasing out of steamers and the addition of new liquefaction capacity will continue to drive the sector forward.
About UPI
Established in 2020, the UP World LNG Shipping Index is a rules-based family of stock indices designed to measure the performance of publicly traded companies worldwide engaged in the maritime transportation of liquefied natural gas (LNG). This unique index comprises 21 companies and partnerships worldwide, representing more than 65% of the global LNG carrier fleet in 2020. The UP Index provides premium services, offering freemium and trial access to charts. With the Freemium plan, users can access the basic UP Index vs S&P 500 chart after completing email registration. The trial includes full access for fourteen days.
Final Note
This report primarily relies on technical analysis using weekly data. The summary section is AI-generated.
Disclosure: The author holds beneficial long positions in the shares of ALNG, EE, FLNG, and NFE, whether through share ownership, options, or other derivatives. This report was prepared in-house and reflects our own opinions. We have received no compensation for it and have no business relationship with any company whose shares are mentioned herein.
Disclaimer: This report is provided for informational purposes only and does not constitute investment advice, nor a recommendation or solicitation to buy or sell any securities. It relies primarily on technical analysis using weekly data. Readers should conduct their own research and consult a qualified financial adviser before making any investment decisions.