Shares of liquified natural gas (LNG) shipper GasLog (NYSE:GLOG) fell as much as 17% on Jan. 20. There didn't appear to be any company-specific news that would lead to the drop, however a change in direction in Asia likely pushed investors to be a bit more cautious.
GasLog helps to move LNG around the world. Depending on demand, the day rate for ships can be quite volatile. Over the last couple of weeks a cold spell in Asia has resulted in a drawdown in LNG supplies in the region. As traders looked to replenish their inventories LNG prices spiked and, along with them, the cost of shipping it. That is good news for companies like GasLog and investors bid the stock up.
However, LNG prices in Asia appear to have peaked and are, perhaps, starting to move back down again, according to industry watchers. That means that demand for GasLog's ships will probably cool as well. Investor enthusiasm here reversed course, as you would expect, and they sold the stock. That's not particularly shocking.
The swift ups and downs in the shares of GasLog aren't atypical for a company that owns LNG carriers. In fact, it's pretty much par for the course in the space. That said, the swiftness of the price moves in Asia is still interesting, given that the global supply/demand equation was tilted heavily toward oversupply for much of 2020. It's something that investors might want to keep in the back of their minds as they evaluate the prospects of energy-related stocks like this one.