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Exports of liquefied natural gas (LNG) out of the United States dropped by 5% in January compared to December amid higher U.S. demand in colder weather, according to data from Refinitiv Eikon cited by Reuters.
U.S. exporters sent out 95 cargoes with 6.84 million tons of LNG on board in January, with Europe getting 68% of those and Asia receiving 23% of all U.S. LNG exports, Refinitiv Eikon data showed. To compare, LNG exports from the United States were 7.22 million tons in December, and Europe was the destination of 79% of those.
Europe continues to attract most of the U.S. exports of LNG as demand in Asia is still weak. Both the European benchmark prices and spot Asian LNG prices have dropped in recent weeks amid a comfortable level of inventories and tepid demand in Asia at the start of the Chinese reopening and around the Lunar New Year holiday.
In the U.S., lower LNG exports mean higher volumes of gas available domestically. During the current cold snap, gas demand in the United States is projected to be high to very high by the end of the week at least, according to NatGasWeather.com.
“While this week will bring strong to very strong national demand as frigid air sweeps across the northern and central US , the weather data keeps trending warmer for Feb 5-13 and where light to very light national demand is expected as the southern and eastern US warm well above normal,” NatGasWeather.com said on Wednesday.
Lower LNG exports and thus higher availability of gas for domestic use, coupled with strong domestic production, have sent the U.S. benchmark natural gas prices to a 20-month low in recent days.
The restart of the Freeport LNG export facility could lend some support to U.S. natural gas prices, but the delays in the resumption of export activity at the plant have been bearish for U.S. natural gas prices.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.