Summary
LNG shipping stocks saw strong growth last week, with the UP World LNG Shipping Index (UPI) gaining 3.15%, outpacing the S&P 500’s 1.36% rise. The surge in LNG stocks was driven by improved U.S. economic prospects following a cut in interest rates. Excelerate Energy (NASDAQ: EE) led the pack with a 9.9% rise, while Awilco LNG and Japan’s “K” Line also posted significant gains. Despite these increases, several stocks, including Golar LNG (GLNG) and Dynagas (DLNG), showed sideways movement. However, due to high debt concerns, New Fortress Energy (NFE) experienced a sharp 20% drop.
UPI & SPX
Last week, UPI, which tracks listed LNG shipping companies, gained 5.22 points, or 3.15%, closing at 171.16 points. The S&P 500 index gained 1.36%. The chart below shows both indices with weekly data.
Broader view
Last week’s stock growth was mainly influenced by the cut in US interest rates, which is seen as a confirmation of the improvement in the US economy. The LNG shipping sector grew faster than the SPX, with representatives from all geographic locations contributing to the UPI’s growth.
The UPI confirmed its uptrend, and we can expect the 174-point mark to be surpassed.
Constituents
Excelerate Energy (NASDAQ: EE) was the biggest riser, adding 9.9% on above-average volume. Norway’s Awilco LNG (OSE: ALNG) also surpassed the 9% threshold, adding three-tenths to the 9% mark. While EE has established a new higher closing price and is on the cusp of growth, ALNG is going sideways.
The third most robust growth came from Japan and is due to the “K” Line (TSE: 9107), which rose 8.5%. However, it, too, is heading sideways and awaiting further direction. Another Japanese company, NYK Line (TSE: 9101), grew by 8% and seems more likely to continue its growth, although this growth is still at a slightly illegible start. To this group, we can also count a seven per cent growth of Golar LNG (NASDAQ: GLNG). GLNG signed a $1.6B engineering, procurement and construction contract with CIMC Raffles shipyard in China to convert a liquefied natural gas carrier to an MK II-design floating LNG production vessel last week. MK II is an evolution of FLNG’s Hilli and Gimi design.
The other increases were not as substantial and, except MOL (TSE: 9104), did not exceed 5%. Dynagas LNG (NYSE: DLNG) is still holding its support above $3.50, having added 4.4% last week and continuing sideways.
Korea Line Corporation (KRX: 005880) continued its broad uptrend and added 3.3% last week. The last Asian proxy, Malaysia’s MISC (KLSE: 3816), rose 2.2% and continues to correct the previous August decline.
The gas and oil mining trio grew from 1.6% to 3.6%. According to our charts, the situation of these companies seems ambiguous to rather negative. The trio is hovering around support levels and possibly below. Shell’s chart (NYSE: SHEL) looks relatively better, while the thesis of move-around support from below holds for Chevron (NYSE: CVX) and especially BP (NYSE: BP).
New Fortress Energy (NASDAQ: NFE) stock was the biggest loser, which wrote off nearly 20%. In one week, it closed at $9.49. Since the beginning of August, the company has lost 50% of its value, primarily due to high debt.
Other declines have been cosmetic and have not exceeded one per cent: Cool Company (NYSE/OSE: CLCO) -1%, Tsakos Energy Navigation (NYSE: TEN), Nakilat (QSE: QGTS) -0.8%, Flex LNG (NYSE/OSE: FLNG) -0.3%.
About UPI
Established in 2020, the UP World LNG Shipping Index is a rules-based stock index family designed to measure the performance of worldwide publicly traded companies involved in the maritime transport of liquefied natural gas (LNG). This unique index covers 19 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 email registration. The trial includes full access for fourteen days.
Source: UP-Indices.com