• 6 days Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO
  • 10 minutes America Could Go Fully Electric Right Now
  • 8 days Majors Oil COs diversify into Renewables ? What synergies forget have with Solar Panels and Wind Tirbines ? None !
  • 8 mins Most ridiculous green proposal
  • 6 hours The Green Hydrogen Problem That No One Is Talking About
  • 2 hours Rethinking election outcomes for oil.
  • 19 hours China Sets Its Sights On Global [EV, AI, CRISPR, Fusion, Navel Lint Collector] Dominance
  • 1 min Biden's laptop
  • 13 hours The City of Sturgis Update on the Motorcycle Rally held there, and the MSM's reporting hence
  • 40 mins P@A will cost Texas Taxpayers $117 Billion.
  • 3 hours QUESTION: With worldwide 1.4 Billion passenger vehicles and 360 Million commercial vehicles using combustion engines how long before gasoline and distillates measurably decline. .
  • 6 hours Video Evidence that the CCP controls Joe Biden
  • 2 days Republicans Have Become the Party of Hate
  • 7 hours Making diamonds from thin air
  • 2 days Australia’s Commodities Heartland Set for Major Hydrogen Plant
China Believes Natural Gas Demand Will Soar

China Believes Natural Gas Demand Will Soar

China’s largest natural gas supplier…

U.S. LNG Braces For More Cargo Cancellations

The U.S. LNG industry expects to see buyers cancel as many as 45 LNG cargoes for August loading as natural gas demand in the Asian market and bloated European LNG inventories sap enthusiasm for U.S. LNG, Reuters sources said on Monday.

That’s similar to the number of U.S. LNG cargoes that were canceled for July loading as well. For June loading, the cancellations were fewer but still substantial—anywhere from 20 to 30.

Part of the problem is the narrow profit margin for U.S. LNG, with Henry Hub prices sitting too close to European gas prices. Just 10 cents per million British thermal units separate the two. At that price, it’s impossible to turn a profit when factoring in shipping costs.

It’s less expensive to pay the cancellation fee.

The cancellations in July and August will mean that U.S. LNG exports will fall by one-third compared to how much the U.S. was shipping back in January.

So far, the cargo cancellations have hit Cheniere’s production the hardest, according to S&P Global Platts.

The canceled cargoes go to support the notion that the U.S. has become the industry’s swing producer, flailing when times are tough and booming when times are good. The cargo cancellations will soon—if they haven’t already—spill over into chartered vessel demand, pipeline transport volumes, and eventually shale gas drillers in the United States, as demand for LNG at U.S. export terminals remains subdued.

Related: WTI Jumps To $40 On Demand Recovery

IHS Markit analyst Matthew Shruhan forecast in May that more cancellations would follow.

Sustained low prices for LNG have already caused companies to cut capex and to delay LNG projects going forward, which will, in the long run, help to deplete the inventory overhang. Morgan Stanley sees this overhang dissipating sometime in 2022.

By Julianne Geiger for Oilprice.com

More Top Reads from Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News