Despite the slump of liquefied natural gas (LNG) demand, the sharp increase in US output has maintained the country’s position as the world’s third-largest exporter of the commodity as it has successfully sustained its Asian market.
According to Refinitiv Eikon, in the January to July period of 2020, the US exported 26.5 mt of LNG, a 41% soar year-on-year. The country added more than 16 mt of LNG capacity this year.
The US exports to Asia and Europe remain much higher than the same period in 2019 as the price differential between the US and other markets are wide enough. The result still came after multiple cargoes were cancelled on the back of the coronavirus impact.
US LNG deliveries to Latin America posted a summer dip, but the shipments to Asia in June and July grew by 67% year-on-year while supply to Europe just slid down by one cargo.
Looking ahead, analysts estimated that the dip in US exports would continue in August as the cancellations in July and August were not shown in deliveries.
However, in September and October, winter cargoes are seen to mainly go to Asia where prices would likely increase.
Analyst Trevor Sikorski of Energy Aspects commented, “We expect to see fewer cancellations in September and October because even if prices are low, a price contango will pay for floating cargo and delivering it at a higher price in winter.”
