20 November 2020
- This week we have started to see a change to the continual supply increase we described in our previous publication. We have started to see a trend towards supply tightening from the USA. However, we continue to expect oversupply for the month of November overall. This contrasts with an increase in our Geographical Flow Spread index. This index accounts for LNG carrier flow across key routes and has shown considerable fluctuation as of late, but this week has returned to lowered values.
- This week, we have seen further deterioration to demand from Europe and this is linked to the weather forecasted for the next two week. Furthermore, when considering the current price spreads between Henry Hub and TTF, we are also not expecting boosts in imports of gas from the US as the spreads have been narrowing. This is presented in the chart of the week. In regard to Asia, we have seen several weeks of low demand and this appears to be maintained this week as well.
- After weeks of continued improvement to the FX markets relevant to LNG, our Currency Impact Index appeared to peak in week 46 by finally returning a positive value. However, since then we have returned to a negative signal once again. Meanwhile, our measure of Energy Intensity also returned to a negative signal this week. We currently expect this negative signal to be maintained and slightly emphasized moving into week 48.