LNG Cancellations for September are reduced from Summer's higher levels

July 21, 2020

LNG cancellations for September 2020 are expected to come in at ~25 cargoes. This is less than the 40-45 cargoes cancelled in July and August. The uptick for September equates to an additional 2.4 Bcf/d in demand. With LNG sendout at roughly 3.3 Bcf/d last week and averaging roughly 3.7 Bcf/d this week, that would imply September improving closer to 6 Bcf/d. This will help control gas injections in the shoulder, leaving supplies for winter high but not glutted. Along with reduced production growth via record low rig counts, 2021 should have tighter balances. This of course assumes that Covid will not undermine demand excessively. Markets are teetering back and forth on that front, currently balanced by higher case counts & improved therapeutics/vaccine prospects.  

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