The U.S. exported 7.29M metric tons of liquefied natural gas in May, the second highest on record, Reuters reported on Wednesday, citing Refinitiv Eikon data.
May’s exports rose 5% from 6.93M tons in April and 12% from a year earlier, based on vessel tracking, according to the report; the record of 7.67M tons was set in March.
U.S. LNG producers sent nearly two-thirds of total cargoes to Europe as customers sought more gas in anticipation of reductions in Russian supplies, but demand in Europe likely will ease soon as inventories build and winter heating season ends, paving the way for more U.S. shipments to Asia and elsewhere.
Exports are getting a boost from additional capacity from Venture Global LNG’s new Calcasieu Pass terminal in Louisiana and higher production at top U.S. exporter Cheniere Energy (NYSE:LNG).
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Natural gas futures (NG1:COM) finished +6.8% on Wednesday at $8.696/MMBtu, helped by forecasts for a bullish weekly storage report and remarks from EOG Resources (NYSE:EOG) CEO Ezra Yacob, who said natural gas markets are facing “structural change.”
According to Reuters, Yacob told the Bernstein Strategic Decisions Conference that the change in gas markets “has to do with coal-switching and obviously kind of an awakening… in Europe right now of realizing that policy was pushing the transition a little bit faster than technology could deliver.”
Yacob also said he expects EOG (EOG) will increase its oil production this year by ~5% but likely no more, since that would erode capital efficiency.
Believing Europe will make good on commitments to eliminate Russian gas, oil and coal imports in coming years, Morgan Stanley analysts say they are bullish on oil and gas.