The UP World LNG Shipping Index (UPI) increased by 0.34% to reach 170.70 points, recovering from previous losses and remaining above the crucial 170-point mark. Despite global uncertainties and anticipated near-term volatility, the long-term outlook for LNG shipping remains positive. Factors such as demand growth, policy changes, and new contracts are likely to influence its future direction.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, gained 0.58 points (0.34%), closing at 170.70 points, while the S&P 500 index gained 0.33%. The chart below illustrates the performance of both indices with weekly data.
Week 36-2025: Chart of the UP World LNG Shipping Index with S&P 500 (Source: UP-Indices)
Broader view
Last week, the UPI recovered its previous losing week and is holding steady at the 170-point mark. It remains above a crucial threshold, which offers optimism for its direction until the end of the year. The situation in the sector appears stable, although external factors, particularly geopolitical influences, pose the main risks.
Constituents
The movements within the index constituents were more significant than the overall movement of the index itself, although none reached double digits. Aside from the fluctuations of oil and gas producers resulting from OPEC’s decision, most changes were due to ex-dividend declines and rebounds from support levels. However, some of these movements suggest the beginning, or at least an effort, to establish a new trend. Let’s examine those first.
NYK Line (TSE: 9101) broke through resistance and closed the week with a 3.5% gain. The first attempt at the end of July was rejected, but at the same time, there was no counterpressure below support. Last week’s breakout was also supported by above-average volume.
Another Japanese company, ‘K’ Line (TSE: 9107), performed more cautiously, gaining 2.2% and slowly settling at higher levels. However, growth has been very cautious so far, which is reflected in only average volume.
Dynagas LNG Partners (NYSE: DLNG) rose 4.4% above resistance in anticipation of results, but also with only average volume. MLP took advantage of the stability of its cash flow based on long-term contracts and exercised its option to repurchase its ‘B' preferred shares.
Golar LNG (NYQ: GLNG) had a fraction of the average volume, maintaining hopes of continuing its growth above $45. Last week, the price rose by 0.9%, mainly due to the Doji formation from the week before last. The last two weeks have seen movement primarily within the range of three weeks ago, when there was an 11% breakout.
COSCO Shipping Energy (SS:600026) is growing, increasing by 7.1% after a correction and continuing its upward trend.
Interestingly, Tsakos Energy Navigation (NYSE: TEN) can also be included among the growing companies, which successfully avoided a significant decline, closing at the same level as the week before last with a loss of only 0.1%.
Capital Clean Energy Carriers (NYSE: CCEC) demonstrated a 3.2% growth rate while successfully averted an attempt to break through support. The trading volume is very low, so the direction is not yet decided. However, it seems that someone has shown sufficient resistance to the price decline.
We have already mentioned the mining trio, so let’s add the individual percentages. Chevron (NYSE: CVX) lost 4.3%, BP (NYSE: BP) fell 3.7%, and Shell (NYSE: SHEL) fell 3.1%.
Cool Company (NYSE/OSE: CLCO) corrected its growth, losing 6.6% on below-average volume.
Flex LNG (NYSE/OSE: FLNG) fell 5.3% after going ex-dividend.
Excelerate Energy (NYQ: EE) tested support, falling 2.9%, which was enough to maintain this level.
ADNOC LS (ADX: ADNOCLS) also corrected its growth, falling 1.47%. However, pressure for greater growth has been reflected so far, although the traded volume was significantly above average.
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.
Source: By Tomas Novotny, UP-Indices.com