LNG

[dan_s]

Note from HFI Research this morning:

A Trump victory means that the Biden-era policy of pausing all new LNG permits will be eliminated swiftly. Natural gas producers are rallying steeply today, but from a market timing perspective, the market may be ahead of itself.

For starters, the LNG permitting/funding process takes years. And even if they expedite the approval process, the building part is a multi-year process. In essence, new LNG facilities being approved have no impact on near-term supply and demand, and despite my bullishness for natural gas in the long term, this move is not efficient.

In addition, natural gas still has to contend with 1) the bearish weather forecast so far and 2) growing production. The worst is not over yet, so enthusiasm for natural gas needs to be tempered.

Conclusion
For oil, Trump is net bullish. Watch for sanction enforcement in early 2025, Iranian floating storage building will be the leading signal.

For natural gas, long-term is bullish, but new LNG facilities won't have any impact on near-term supply/demand. The market is getting ahead of itself.

Chinese equities are selling off, but this will ultimately prove to be the wrong move. More fiscal stimulus announcements are coming, which should boost the equities along with expectations on China's oil demand growth. < Fear of a major recession in China should decline, allowing WTI to move into the "Right Price" range of $75 to $85 per barrel.

US oil production will not be impacted because Trump won. Drill baby drill is just rhetoric with no substance.

[aja57]

It’s all falling into place from the Trump Effect

https://www.zerohedge.com/commodities/eu-bows-trump-we-could-buy-more-american-lng

https://newsletter.doomberg.com/p/shift-shaping?utm_campaign=email-post&r=oc969&utm_source=substack&utm_medium=email

[dan_s]

Under Trump's administration, LNG export capacity expansion could be swift if a Republican-led government decides to expedite LNG terminal approvals and 'unleash' American energy, starting with the removal of Biden's LNG pause, potentially increasing LNG exports by up to 15% by 2030. The European gas benchmark TTF could decrease by up to 9% compared to Aurora's Central scenario if this were to happen, while Asian gas prices could also decrease by up to 6%. To meet this demand for additional exports, US gas production is projected to grow by 4% by 2030, according to Aurora. However, international LNG exports could still decline, largely due to reduced demand from China if Trump also introduces his proposed universal tariffs.

"The Trump administration would have no direct influence in directing LNG flows away or to the EU, but his administration is likely to remove barriers to LNG terminal buildout capacity that would increase exports, which would suppress European gas prices, as shown in our recent insight report," Sophie Parsons, Senior Analyst for US Gas at Aurora Energy, noted.

Trump hasn't even stepped into the White House. All sorts of moves are happening behind the scenes and then being revealed in the public domain, such as a potential resolution to the war in Eastern Europe and Iran-backed Houthis allegedly declaring a ceasefire.