Natural Gas News: Weaker Amid Lingering Freeport LNG Recovery Doubts

US Natural Gas Prices Dip

US natural gas prices continued their decline on Wednesday, extending Tuesday’s retreat. Lingering doubts surrounding Freeport LNG’s recovery and anticipation of bearish monetary policy news contributed to the market sentiment.

At 14:03 GMT, Natural Gas Futures are trading $1.928, down $0.063 or -3.16%.

Market Conditions Overview

According to NatGasWeather, the US is experiencing favorable temperatures across most regions from May 1-7, with highs ranging from the 60s to 80s. However, localized hotter temperatures in the 90s are observed in the southern US, while cooler conditions in the 50s prevail in the Northwest and Northern Rockies. Weather systems are bringing showers, and strong thunderstorms are forecasted to impact the central and east-central US. Overall, national demand remains light and low.

Factors Affecting Demand

Wind energy generation has been robust this spring and is expected to remain strong over the next 15 days, offsetting increased natural gas usage. Additionally, solar generation has shown year-over-year strength.

European Natural Gas Market Sentiment

According to an article on Oilprice.com, portfolio managers have increased their bullish bets on Europe’s benchmark natural gas price, anticipating continued volatility. Concerns over unplanned outages in Norway, rising natural gas demand in Asia, and the impending end of the current gas transit deal for Russian pipeline gas via Ukraine by the end of 2024 have contributed to this sentiment.

The net long position in Dutch TTF Natural Gas Futures, Europe’s gas trading benchmark, rose to its highest level since October 2023. Traders foresee potential supply disruptions and price increases, especially with Europe’s increased reliance on LNG imports following disruptions in Russian pipeline gas flows.

Short-Term Forecast

Despite weaker demand in recent years due to milder winters, energy-saving targets, and sluggish industrial demand in the EU, traders anticipate market jolts as the 2024/2025 winter approaches. Uncertainties surrounding weather patterns and supply trends, coupled with Europe’s evolving energy landscape, contribute to the market’s cautious yet optimistic outlook.

In summary, US natural gas prices face downward pressure amidst lingering uncertainties and anticipation of bearish monetary policy news. Traders eye European natural gas markets for insights into global supply trends and potential price movements.

Technical Analysis

Natural Gas prices are under pressure on Wednesday. As the bottom-forming process continues, the charts have identified $2.092 as a potential trigger point for a change in the minor trend.

The most important indicator to watch is the intermediate-trend indicator. It will change to up when buyers overcome the 50-day moving average at $2.193.