The amount of natural gas flowing on pipelines to US liquefied natural gas (LNG) export plants plunged to a 13-month low in June, a signal of weak worldwide demand due to government lockdowns to stop the spread of the new coronavirus.
Worldwide LNG prices collapsed to record lows in Europe and Asia in recent weeks due to oversupply of natural gas, even though consumption has remained stronger than that of travel restriction-depressed gasoline.
US prices are less favorable than in the past, making it less attractive for overseas buyers. Buyers in Asia and Europe have canceled over 20 US LNG cargoes for both June and July, with more anticipated.
The amount of gas flowing to US LNG export plants fell to 3.7 billion cubic feet per day (bcfd) on Monday and was on track to fall further on Tuesday, according to data from Refinitiv.
“We’ve been bearish on US LNG feed gas demand, but yesterday’s level still caught us by surprise,” US financial services firm Tudor, Pickering, Holt & Co said in a note.