The UP World LNG Shipping Index (UPI) declined by 1.60%, while the S&P 500 dropped by 2.27%. In a broader view, geopolitical risks in shipping routes slightly eased, but LNG spot rates remained low, prompting shipowners to withdraw older steam-powered ships from active markets. Among the index constituents, optimism is growing as stocks like Nakilat, Cool Company, and Awilco LNG showed gains, while others such as New Fortress Energy and Korea Line Corporation faced losses. However, the general trend suggests a potential upside rather than a lasting decline, with investors watching key resistance levels for future market direction.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, lost 2.70 points (1.60%), closing at 165.98 points, while the S&P 500 index declined by 2.27%. The chart below illustrates the performance of both indices with weekly data.
Broader view
The influence of geopolitics decreased last week, although at the end of the week, the situation in the Red Sea escalated again, leading to changes in shipping routes.
Spot rates remain low, but this is something to be reckoned with, and shipowners are responding slowly but expectedly – by withdrawing steam-powered ships. Lucy Hine from TradeWinds wrote: “Brokers said at least seven LNG carriers are now classed as in cold lay-up, with talk of a similar number ready to follow them.” These ships have not yet left the global fleet, but are not currently being offered on the market. No one will offer them a long-term contract, and short-term offers will remain below operating costs.
Constituents
While the UPI failed to break above resistance at 169 points, a realignment of forces reinforced our optimism: growth is likely for more companies than a week ago. While there were no double-digit moves, the embrace remained above average, and it’s safe to say that attempts at more significant declines were rejected. It’s as if buyers already find prices favourable.
Optimism is undoubtedly boosted by the rise of Qatar’s Nakilat (QSE: QGTS), which closed above the previous high area from the summer of 2024 on its third weekly rise in a row.
However, Cool Company (/OSE: CLCO) demonstrated the highest growth, rising nearly six per cent to curb the previous two weeks of declines that followed its quarterly results.
Awilco LNG (OSE: ALNG) followed a similar pattern to CLCO, correcting the decline with a 4.4% rise. There is a noticeable overlap between buyers and sellers for both companies, with the former not allowing more profound losses but sellers not wanting to give up on the opportunity. Thus, the result is candles with significant shadows and tails.
After closing its growth gap in a three-week decline, the bp (NYQ: BP) also showed an upside correction, gaining 4.1%.
Golar LNG (NYQ: GLNG) also corrected its monthly decline. This loss also ended the previous year’s uptrend, with prices now back to November’s levels. However, the decline from earlier in the week has been translated into an overall weekly rise.
Shell (NYQ: SHEL) broke through resistance and closed above it, supported by above-average volume, breathing new life into the upside.
According to technical analysis, Capital Clean Energy Carriers (NYQ: CCEC) and Tsakos Energy Navigation (NYQ: TEN) are poised for upside, though they were hovering around zero last week.
New Fortress Energy (NYQ: NFE) was the biggest loser last week, losing 6.2%. Still, there is a lot of upside hope for it, as the tail is also long here for a second week.
Korea Line Corporation (KRX: 005880) lost 4.6%, but the stock price has remained within the range for many months. The Japanese trio also lost percentage-wise, yet prices are near the upper resistance boundary against the declining Japanese stock index.
Dynagas LNG Partners (NYQ: DLNG) also slowed its decline slightly during the week, increasingly moving into its previous price range.
So you could say last week’s declines weren’t trend changes but preparation for the upside. To the author himself, this seems like a bold statement in these uncertain times.
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.
Source: By Tomas Novotny,
