12 June 2020
- In response to the over-supply on the LNG market, we have seen decreases in feed-gas volumes headed towards American LNG facilities, producing a tightening in supply. We have also seen an increase in LNG tankers in key ocean basins though our proprietary Geographical Flow Model. This follows several weeks of decline due to Covid-19. Despite these suggested improvements, import volumes are still low and our estimated forward supply for the whole month of June is showing a drop on last months’ values.
- European lockdown limitations are slowly lifting. This is coinciding with a period of less favourable conditions for renewables and a tightening in nuclear production. Our forward demand indicator also expects European demand to increase. We have also seen Asian LNG demand increase on last week. These two weeks have shown a severe disruption to the continual Asian demand growth we had been seeing since approximately week 18. This is shown in the chart of the week. These increases in demand have also been reflected in our proprietary Buying Pressure Index which takes into account the desire to buy on the physical market. This index has shown increases as of late.
- We are continuing to see improvements to the macroeconomic environment. We have continued to see improvements to credit for the third week in a row now, as shown by our Money Markets Liquidity Index. In our last note we commented on our Energy Intensity Index, this has also continued to improve and has since produced positive values, reflecting improvements to GDP relative to gas consumption.