LNG Stock Forecast: Cheniere Tops Energy Sector With 39.10% Stock Increase

LNG Stock Forecast

This article was written by Graham Ellinson, a Financial Analyst at I Know First currently studying Mathematics at Northumbria University Newcastle.


“Now, more than ever, it is crucial that the United States use its abundant energy resources to support friends and allies abroad” – Sean Strawbridge, CEO of the Port of Corpus Christi


  • Cheniere Energy, Inc. (Ticker: LNG) shares have been trading -8.94% off its 52 week-peak
  • Liquefied natural gas accounts for only a small amount of the global crude oil market it is estimated to amount for 10% of the crude oil market by 2020.
  • China imposed a new 10 percent tariff on all U.S. imported liquefied natural gas, lowed than the original 25% touted.
  • Current I Know First Forecast remains bullish on Cheniere.

Source: Flickr

Cheniere Energy, Inc. (Ticker: LNG) shares have been seen trading -8.94% off its 52 week-peak and changed 47.84% from its 52 week-bottom price value. Cheniere Energy is an international energy company headquartered in Houston, Texas, and is the leading producer of liquefied natural gas (LNG) in the United States. The LNG market has been growing with Asia driving robust growth. The demand from China alone grew by more than 50% in the first half of 2018. With revenue after the second quarter of 2018 up by 24.34% from the same time in 2017 is confirmation of its strong performance over the past year.

The chart above shows how LNG stock price has undergone steady growth. It further illustrates that it has consistently outperformed the Energy Sector (XLE) increasing by a margin of 29.46% more. Despite the usual roller-coaster of the global energy market, liquefied natural gas is seen as a solution that has a steady demand, with relatively few competitors owing to the costly nature of processing LNG. With the current price of Price of Liquefied U.S. Natural Gas Exports  at $5.28 per Thousand Cubic Feet down from the highs of $16-17 per Thousand Cubic Feet back in 2016 it makes it a particular attractive purchase for foreign consumers.

Liquified Natural Gas is More than an Energy Solution

Although LNG accounts for only a small amount of the global crude oil market it is estimated to amount for 10% of the crude oil market by 2020. Natural gas is mainly converted to LNG form for transport over the seas where laying pipelines is not feasible technically and economically. LNG achieves a higher reduction in volume than compressed natural gas (CNG) so that the (volumetric) energy density of LNG is 2.4 times greater than that of CNG (at 250 bar) or 60 percent that of diesel fuel. This makes LNG cost efficient in marine transport over long distances.

source: Flickr QatarGas

Although laying a traditional pipeline remains the dominant form of transporting natural gas LNG presents countries with an added layer of political protection. For example, European countries have long been reliant on Russian gas lines. With huge reduction in the cost of transporting LNG it has opened up the market and allowed countries to go ‘shopping’ without being forced into buying natural gas from a neighbour. The cost of producing LNG however, is still far from a cheap process in comparison to other forms of crude oil production and the consumers are still by and large countries such as Japan, South Korea and France, that have little natural recourses and do not have neighbouring countries that can easily pipe natural gas to them.

China imposes LNG import tariff

A new 10 percent tariff has recently been imposed on all U.S. imported LNG. This is part of a larger set of tariffs China have recently imposed on U.S. imports in a tit-for-tat trade war between the U.S. and China. In 2017 China purchased around 15% of all U.S. based LNG recent proposals anticipate exports for U.S. produced LNG to China to exceed 60% by 2023. However, share prices did not fluctuate in accord with this tariff and it does not seem to have deterred investors. One reason for this was the tariff imposed was considerably lower than the 25% that China threatened, indicating that perhaps LNG is more important to the Chinese market than they make out.

At present natural gas plays a relatively small role in China with it amounting for only 5% of its total energy demands. That being said Chinese authorities see natural gas as a cleaner and lower carbon emitting fuel alternative to traditional coal. Natural gas is expected to supply 10% of the nation’s energy supply by 2020. China has steadily increased its portion of LNG imports year on year to meet its domestic shortfall. Despite and energy deal with Russia to import natural gas LNG still outpaces pipeline imports.

Source: IHS Markit, China National Development and Reform Commission, China Customs, National Bureau of Statistics

The sustainability of the LNG industry has a strong outlook

Currently, Cheniere Energy Inc remain at a buy with its development of its new export operation looks set with the big operational risks of opening up a new port in the past the future is certainly far more stable. With the new fracking technology that has opening new supplies for LNG there will be no supply shortage. Now with two export ports: Sabine pass and Corpus Christi investors can expect very little hinderance in terms of production and transportation. Furthermore, global demand for natural gas looks set to increase as it is a cleaner and more efficient energy source.

Current I Know First Forecast

Current I Know First remain bullish especially for the 3 month and one year time frames with a signal of 19.22 for the 3 month period and an extremely high signal of 402.97  and a predictability of 0.8 for the year long forecast.

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I Know First gave bullish forecast for LNG on September 5th, 2017  with a strong signal of 124.05, and predictability of 0.68 for the year long forecast. Over this period LNG stock increased by +52.79%.

This bullish LNG forecast was sent to the current I Know First subscribers on September 5th


Cheniere Energy, Inc. (Cheniere), incorporated on March 25, 1983, is an energy company primarily engaged in liquefied natural gas (LNG)-related businesses. The Company operates through two segments: LNG terminal business, and LNG and natural gas marketing business. Its LNG terminal segment consists of the Sabine Pass and Corpus Christi LNG terminals. Its LNG and natural gas marketing segment consists of LNG and natural gas marketing activities by Cheniere Marketing. Cheniere Marketing is developing a portfolio of long- and medium-term SPAs with professional staff based in the United States, the United Kingdom, Singapore and Chile. The Company conducts its business through its subsidiaries, including the development, construction and operation of its LNG terminal business and the development and operation of its LNG and natural gas marketing business. The Company owns and operates the Sabine Pass LNG terminal in Louisiana through its ownership interest in and management agreements with Cheniere Partners.