Summary
The UP World LNG Shipping Index (UPI) gained 0.57% to 168.10 points, outperforming the S&P 500’s 0.08% rise. However, this masks significant intraweek volatility as many stocks reversed early declines. Awilco LNG led gainers with nearly 5%, its first rise in six weeks. COSCO Shipping Energy Transport added over 4%, while Tsakos Energy Navigation gained 3.29%, breaking short-term resistance. New Fortress Energy crashed 21% after postponing results amid creditor negotiations.
The week’s key story was widespread reversals from intraweek lows across Chevron, Excelerate Energy, Flex LNG, Golar LNG, and the Japanese trio, suggesting underlying buying pressure. Fundamentals remain supportive with spot rates above $82,000/day. Trading volume remains elevated, and despite short-term volatility, market pressure appears to be pointing upward.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, gained 0.95 points (0.57%), closing at 168.10 points, while the S&P 500 index gained 0.08%. The chart below illustrates the performance of both indices with weekly data.
Broader View
The development during the week was quite negative, but the decline was mostly reversed into growth or at least mitigated. On the contrary, three companies showed better positive development during the week.
It is slightly surprising that the median movement is only 0.05%, but this is due to a slight upward movement and one significant decline. The ratio of rising to falling companies was 10:11. Trading volume remains above average, although this average is also increasing, as expected.
Positive sentiment in the LNG market continues. Not only has the spot price for tanker charter increased—according to Spark Commodities, it is now above $82,000 per day—but new gas power plant projects are also being announced, such as those by TotalEnergies and EPH.
Constituents
The most significant growth was achieved by Norway’s Awilco LNG (OSE: ALNG), which rose by just under five per cent. This is the first growth in six weeks.
The second-best result was achieved by China’s COSCO Shipping Energy Transport (SS:60026), with a slight increase of just over four per cent. Nevertheless, this is only a sideways shift, and, as with Awilco, the direction of further movement remains to be seen. However, growth is more likely than decline for both.
The last growth we will mention in percentage terms is 3.29% for Tsakos Energy Navigation (NYSE: TEN). TEN showed a nice breakthrough of short-term resistance.
Among the declining companies, we will mention two in percentage terms: New Fortress Energy (NYQ: NFE) fell 21% after postponing the publication of its results due to negotiations with creditors, and ADNOC L&S (ADX: ADNOCLS) fell 3.49%. This decline broke through the previous support level, raising questions about the end of the upward trend.
Why did we summarise the percentage results so briefly this week? Because they do not accurately reflect the developments during the week. As we mentioned in the introduction, many companies experienced a volatile week, mostly turning adverse developments into slightly positive ones in percentage terms. However, as a result, this reverses the attempt to decline in anticipation of growth!
This group includes Chevron (NYSE: CVX), Excelerate Energy (NYQ: EE), Flex LNG (NYSE: FLNG) and, to a certain extent, companies such as Golar LNG (NYQ: GLNG) and the Japanese trio of NYK Line (TSE: 9101), Mitsui O.S.K. Lines (TSE: 9104) and “K” Line (TSE: 9107) or Dynagas LNG Partners (NYSE: DLNG), which closed with negative results. However, all of the companies mentioned rebounded from attempts at more significant declines.
Many of these companies are either maintaining their current position (Dynagas, Golar, NYK, “K” Li-ne) or attempting to resume growth (Awilco, Chevron, Flex).
There were also companies with better weekly performance than at the close, including Korea Line Corporation (KRX: 005580), MISC (KLSE: 3816), BP (NYSE: BP), and Shell (NYSE: SHEL). Here, too, it is either an attempt at further growth or a sideways movement.
Trading remains volatile, but market pressure is pointing upwards. The reason for this volatility is quarterly earnings; this was the case with FLNG.
Crystal Ball
The late-summer rise was rejected, and UPI returned to its previous range, where it now trades. This area provides firm support. In the short term, we estimate a rise in volatility of UPI´s constituents.
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 provides premium services, offering 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.
Final Note
This report primarily relies on technical analysis using weekly data.