The global LNG shipping index (UP World LNG Shipping Index) fell by 6.97 units, equivalent to 3%, reaching 224.91 units. This decrease occurred due to widespread selling in the stock markets, with the S&P 500 index also experiencing a 1.95% drop, marking its largest weekly decline since June. However, internal analyses indicate that the actual performance of the LNG shipping sector is stronger than this decline suggests.
Analysis of LNG Shipping Index Performance
The average decline in the LNG shipping index was only 0.43%, and the weighted index (wUPI) actually increased by 2.87%. These figures indicate that the drop in the index was primarily due to declines in a few large companies and does not reflect a real weakness across the entire sector. The ratio of advancing to declining companies this week was 10 to 11, and trading volumes were above average.
Among Asian companies, two names experienced double-digit increases. Malaysia's MISC saw a 15.4% increase due to the expansion of its LNG fleet and a new contract with Qatar Energy, achieving significant growth. Additionally, South Korea's Pan Ocean also rose by 11% in its stock price, breaking through all resistance levels and moving towards pre-pandemic levels.
Gas Price Fluctuations and Their Impact on the Market
The gas market remains unstable and bullish. Gas prices in Asia have reached $29.30 per million BTU, and European prices have hit their highest level since December 2022. This price increase is due to repeated attacks on tankers in the Strait of Hormuz and strong demand from Europe. Reports indicate that despite increased transits through the Strait of Hormuz, attacks on tankers and uncertainty about safe passage have kept prices elevated.
According to analysts, these disruptions are likely to continue into the winter season, and competition for flexible LNG supply will become a significant bullish factor. For instance, gas prices in Europe have reached €88.57 per megawatt-hour (MWh). Meanwhile, analysts at Morgan Stanley have raised their winter price forecast for TTF to €90 per MWh, with the possibility of it increasing to €135 per MWh under specific conditions.
