Summary
The UP World LNG Shipping Index lost 11.38 points (5.30%) last week, closing at 203.44 points and breaking below its support range. At the same time, the S&P 500 gained 1.43% — its ninth consecutive weekly gain, supported by optimism around a potential US–Iran memorandum and a nearly 10% drop in oil prices. The ratio of advancing to declining stocks was just 3:16, the median change was -3%, and the weighted index fell 3.6% — a convergence with the wUPI, which had been more negative in previous weeks. Trading volume was only slightly elevated.
Four companies posted double-digit declines: COSCO Shipping Energy Transportation led with -14.56%, breaking through support after a failed rally; Korea Line Corporation fell 12.79%, marking the definitive end to April’s near-30% one-week rally; Tsakos Energy Navigation lost 11.80%; and New Fortress Energy fell 11.51%. Excelerate Energy declined 8.6%, FLEX LNG lost 6.85% after its ex-dividend date, and BP fell 5.61% on a CEO change. Among the few gainers, ADNOC Logistics & Services led with +3.28%, followed by Nakilat (+0.46%) and K Line (+0.36%).
UPI & SPX
The UP World LNG Shipping Index, which tracks 20 listed LNG shipping companies, lost 11.38 points (5.30%), closing at 203.44 points, while the S&P 500 index gained 1.43%. The chart below illustrates the performance of both indices with weekly data.
Broader View
A significant decline in the UPI led to a break below the range. The ratio of rising to falling companies was 3:16, the median change was -3%, and the weighted index (wUPI) fell by 3.6%. This marks a convergence of the two indices, with the wUPI having been more negative in previous weeks. Trading volume was slightly higher than in previous weeks, but not significantly so.
The geopolitical situation remains unchanged, despite the new awaited US-Iran memorandum. The pressure from non-involved countries to resolve the situation is increasing. We consider this to be the main driver of potential change.
According to Friday’s Reuters summary, European and Asian prices converged last week; however, Asia remains the primary buyer at higher prices. Eight LNG tankers have transited the Strait of Hormuz since the start of the conflict.
Spot rates for LNG tankers rose above $107,000 per day for the Atlantic and above $78,000 for the Pacific.
Constituents
Four companies saw double-digit declines. COSCO Shipping Energy Transportation (SS: 600026, -14.56%) suffered the biggest loss, turning south after an attempted rally, breaking through support, and falling out of the sideways trend.
The second-largest decline, -12.79%, was seen by Korea Line Corporation (KRX: 005880). For it, too, this means breaking through the support level, but it immediately entered the second zone. This marks the definitive end to April’s nearly 30% one-week rally.
Tsakos Energy Navigation (NYSE: TEN, -11.80%) and New Fortress Energy (NASDAQ: NFE, -11.51%) fell by more than 11%. TEN follows up on the previous weekly candle, in which an attempt to break out higher failed. Last week, therefore, saw a reversal toward the magnetic support level—meaning it is not yet completely out of its influence. NFE fell to its lows within a sideways trend.
Excelerate Energy (NYSE: EE) fell 8.6%, but it was merely a pullback from previous highs toward support. Here, too, a previous attempt at an uptrend failed, which we had commented on as a breakout that stalled at the magnetic resistance of the high prices (candlestick wicks on the candlestick chart).
FLEX LNG (NYSE: FLNG) fell 6.85% after its ex-date and closed below $30. However, the support level is not until around $29.
A loss of more than 5% was then suffered only by BP (NYSE: BP), which saw a change in CEO. The decline was 5.61%.
Golar LNG (NASDAQ: GLNG) lost 4.98%, breaking through the support level of the sideways trend.
Chevron (NYSE: CVX) lost 4.69%, but remains in a sideways trend. The aforementioned decline roughly covered the entire range.
EXMAR (EBR: EXM) and Mitsui O.S.K. Lines (TSE: 9104) fell by three per cent. The three-week pause in the decline was thus not a turning point but simply a pause.
Dynagas LNG (NYSE: DLNG) fell by 2% following its quarterly results, but that does not change anything.
Shell (NYSE: SHEL) fell by 1.9% but managed to return above support.
NYK Line (TSE: 9101) was not very successful and continues to decline, albeit at a slower pace after returning to its previous price. The weekly decline was 1.45%.
We should also mention MISC (KLSE: 3816), which, despite a one per cent decline, remains sideways.
Among the gainers, ADNOC Logistics & Services (ADX: ADNOCLS) posted the biggest gain, adding 3.28% and still trading below the resistance level of its all-time high.
The remaining two rising companies posted significantly lower gains. NAKILAT (QSE: QGTS) added 0.46%, and “K” Line (TSE: 9107) added 0.36%. Both are trading in a sideways trend.
Crystal Ball
Despite the decline, the overall outlook remains unchanged. The second quarter is typically the weakest seasonally, but this year will be different—geopolitical circumstances have knocked nearly 20% of global LNG production offline. While Europe still enjoys a certain advantage over Asia, it now needs gas, and rising prices are hitting the poorest consumers, such as those in Bangladesh, the hardest.
The shortfall in supplies will have to be replaced. We view the return to coal as temporary; we expect a gradual increase in spot supplies and greater geographic diversification of sources, which will bring longer shipping routes and higher demand for tankers. Carriers operating on the US–Europe or Australia–Asia routes are in a more stable position.
The outlook remains volatile, but positive in the long term. Companies with spot tankers are benefiting from high rates and longer distances. 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 20 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 UPI 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.