Summary
LNG shipping stocks edged higher last week, with the UP World LNG Shipping Index (UPI) rising 0.95% to 167.97 points, stopping just below long-term resistance. Trading was more volatile than the headline figure suggests, with gains in Japanese companies concentrated late in the week, while several U.S.-listed names faded on Friday. BP broke through key levels with a 7.5% rise, joined by Adnoc L&S, MISC, and Capital Clean Energy Carriers among the stronger performers. Tsakos Energy Navigation and ‘K’ Line tested resistance but failed to break higher, and most other movers remained in sideways patterns. The week’s steepest loss came from Exmar, down 17.5% on a share issue and special dividend, followed by declines in Excelerate Energy and New Fortress Energy. Despite mixed individual results, several companies appear to be positioning for a potential breakout if market conditions align.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, gained 1.58 points (0.95%), closing at 167.97 points, while the S&P 500 index gained 2.43%. The chart below illustrates the performance of both indices with weekly data.
Broader view
The UPI rose by almost 1% and stood below its long-term resistance level. Whether there will be an attempt at growth and whether it will be successful will be determined by individual companies.
Trading last week was again more volatile than the final figures show. Several companies failed to maintain their stronger growth until the end of the week, but Friday was mainly negative for US-listed companies. In contrast, Japanese companies gained most of their growth on Friday.
Constituents
Most companies continue to move sideways, with only a few, such as BP (NYSE: BP), managing to break through and close above critical levels, adding 7.5%. The others were Newcomer Adnoc L&S (ADX: ADNOC), which grew by 3.85%, and MISC (KLSE: 3816), which grew by 3.3%. We can also mention Flex LNG (NYSE/OSE: FLNG), which grew by 1.6% but remained within the range of the previous week. Nevertheless, this indicates a positive shift in the perception of price vs. value.
Capital Clean Energy Carriers (NYQ: CCEC), the second-fastest-growing company, added 6.4% after its quarterly results, but the movement was within the current sideways trend. Chevron (NYQ: CVX) behaved similarly, with a 2.4% increase.
Dynagas LNG (NYSE: DLNG) rebounded from an attempt to decline, but the effort to rise ended up the same way. The resulting 2.6% increase thus led only to a sideways movement. Tsakos Energy Navigation (NYSE: TEN) posted a nice 4.2% increase, but the attempt to break out of the sideways trend was unsuccessful.
Among Japanese companies, ‘K’ Line (TSE: 9107) was the most successful, ending the week at the resistance level and gaining 4%. The other two companies had positive intraday movement, but weakened by tenths of a per cent in a week-on-week comparison. Nevertheless, preparations for growth are underway, and attempts at decline have been repelled. Korea Line Corporation (KRX: 005880) gained 2.3%, reversing the previous decline. However, this may mark the end of the correction, signalling the beginning of a growing trend.
The most significant decline was recorded by Exmar (BSE: EXM), which is now closer to delisting due to the issuance of new shares. The shares lost 17.5%, but this is also due to an extraordinary dividend that is exchangeable for new shares.
Next in line in terms of weekly losses is Excelerate Energy (NYQ: EE), which erased the previous week’s gains with a 4.9% decline. Third in line is New Fortress Energy (NYQ: NFE), which took a break from double-digit movements last week. However, the attempt at growth was repelled, and as a result, the shares fell by 3.5%.
Crystal Ball
Despite the growing global uncertainty caused by the US administration, our outlook remains optimistic. However, we expect increased volatility in the coming weeks. LNG spot rates rise, but the impact remains marginal for most UPI constituents. The market is watching for potential breakouts at key resistance levels, which could determine the next direction of prices.
Our outlook remains steadfastly positive in the long term. The burgeoning demand for LNG, bolstered by situational or management-driven actions and the potential for new long-term contracts, paints a promising picture. Investors should watch policy developments, market competition, and upcoming corporate earnings for further direction.
About UPI
Established in 2020, the UP World LNG Shipping Index is a rules-based stock index family designed to measure the performance of publicly traded companies worldwide involved in the maritime transportation of liquefied natural gas (LNG). This unique index covers 21 companies and partnerships worldwide, representing over 65% of the world’s LNG carrier fleet in 2020. The UP Index offers premium services with freemium and trial access to charts. With Freemium, users can access the basic UPI vs. S&P 500 chart after completing an email registration. The trial includes full access for fourteen days.