Note: This will be the last fundamental report of the year.
LNG cargo cancellations are back in the news. LNG Customers generally required to provide advance notice of cancellations from US liquefaction terminals. For Cheniere ‘s terminal, customers need to generally provide at least 40 days before the beginning of the contract given month.
The Italian utility Enel canceled an LNG cargo for February delivery from Cheniere. Platts reported that a total of five cargoes were heard to have been canceled across US LNG terminals for February delivery.
The reason for the latest US cancellations, appears to be a lack of shipping availability and aggressively high charter rates. Below is a view of the most recent shipping rates. They follow a seasonal pattern based on global LNG demand, i.e., Summer vs. Winter.
Shipping rates play a crucial role in spot LNG cargo economics, hence the global spreads need to widen each winter to accommodate the higher tanker rates.
Today’s Fundamentals
Daily US natural gas production is estimated to be 91.8 Bcf/d this morning. Today’s estimated production is -0.09 Bcf/d to yesterday, and +0.77 Bcf/d to the 7D average.
Natural gas consumption is modelled to be 92.5 Bcf today, -0.76 Bcf/d to yesterday, and -8.3 Bcf/d to the 7D average. US power burns are expected to be 25.34 Bcf today, and US ResComm usage is expected to be 36.8 Bcf.
Net LNG deliveries are expected to be 11.5 Bcf today.
Mexican exports are expected to be 5.9 Bcf today, and net Canadian imports are expected to be 5.3 Bcf today.
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ION-Energy-Daily-Report-Dec-23-2020.pdf