Summary
The UP World LNG Shipping Index (UPI) declined by 1.79% (3.01 points) to 165.38, mirroring broader market weakness as the S&P 500 fell by 1.66%. Increased volatility followed shifts in U.S. policy, raising investor concerns despite potential benefits for LNG shipping. UPI failed to break the 169-point resistance level, with trading volumes below average and several companies nearing or breaking key support levels.
UPI & SPX
The UP World LNG Shipping Index (UPI), which tracks listed LNG shipping companies, lost 3.01 points (1.79%), closing at 165.38 points, while the S&P 500 index declined by 1.66%. The chart below illustrates the performance of both indices with weekly data.
Broader view
Equity markets react to the change in US policy with increased volatility. Investors are beginning to worry that the US President is serious about changing the rules. As we wrote last time, while this may be beneficial for LNG shipping, the other implications may not be so pleasant.
Constituents
The UPI followed the other stock indices and weakened. Thus, it failed to test the 169-point resistance level and continued sideways, as shown in the chart above. The traded volume was below average. Several companies are closer to their support; some have already broken it.
There were no double-digit moves this time, either. The largest increase was 4.4%, and the most significant decrease was 8.1%. The UPI declined simply because there were many more decliners, and the declines were more important.
New Fortress Energy (NASDAQ: NFE) was the biggest loser and continues its downtrend.
Cool Company (NYSE/OSE: CLCO) and Flex LNG (NYSE/OSE: FLNG) lost a similar 6.6% and 6.2%, respectively. While FLNG fell after the dividend record date, CLCO is due to release results on Thursday, February 27.
Golar LNG (NASDAQ: GLNG) has lost 4.3% and is on the edge of October price support, but it is already below prices from the current run-up. Dynagas LNG Partners (NYSE: DLNG) is at a similar threshold after losing 3.3%, and it is close to the April 2024 resistance.
BP (NYSE: BP) corrected -3.2% after an acquisition gain, and Tsakose Energy Navigation (NYSE: TEN) lost 3.1%. TEN is below its support.
Several companies follow with losses of around 2.6%: Awilco LNG (OSE: ALNG), “K” Line (TSE: 9107), Excelerate Energy (NASDAQ: EE), MISC (KLSE: 3816) and NYK Line (TSE: 9101). All that’s left to add is Mitsui O.S.K. Lines (TSE: 9104), down 1.8%.
Like UPI, Japanese companies have failed to break through long-term resistance.
The list of rising companies will be brief. Korea Line Corporation (KRX: 005880) was the top gainer, adding 4.4%. It was followed only by Chevron (NYSE: CVX), which added 1 per cent.
Crystal Ball
The short-term outlook remains cautiously optimistic, though we expect increased volatility in the coming weeks. LNG spot rates stayed low, 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 price direction.
Our outlook remains positive long-term. Demand for LNG is expected to grow, supported by situational or management-driven actions and the potential for new long-term contracts. Investors should monitor 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 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 via LNGshippingStocks.com