Natural Gas Price Fundamental Daily Forecast – Low End EIA Storage Estimate Stabilizing Prices

Natural gas futures are trading lower late Friday in a light trade on Friday. The nearby contract is down about 4% after posting a more than 14% gain the previous session. The catalysts weighing on prices were a slow rise in output and weather forecasts calling for less demand next week than previously expected.

At 19:00 GMT, August natural gas futures are trading $6.041, down $0.256 or -4.07%. The United States Natural Gas Fund ETF (UNG) is at $20.58, down $0.56 or -2.65%.

Freeport LNG Export Terminal Update

Analysts are mixed about when the Freeport liquefied natural gas (LNG) export plant in Texas could return to service. Officials at Freeport LNG have said the plant could return to service by October. Others think the plant could remain shut until at least December and possibly longer.

Bullish traders have been devastated by the news for weeks. Before the Freeport LNG shutdown on June 8, the plant was consuming about 2 billion cubic feet per day (bcfd) of gas. Since then the bears have been in control, saying the Freeport outage will leave more gas in the United States for utilities to inject into storage for the winter.

Refinitiv Supply/Demand Outlook

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 95.9 bcfd so far in July from 95.1 bcfd in June. That compares with a monthly record of 96.1 bcfd in December 2021.

With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 96.1 bcfd this week to 98.1 bcfd next week and 98.9 bcfd in two weeks.

Weekly EIA Report Suggests Supply Will Remain Tight

The Energy Information Administration (EIA) on Thursday reported a 60 Bcf injection into natural gas storage for the week-ending July 1.

Analysts had forecast U.S. utilities added 74 billion cubic feet (bcf) of gas to storage during the week-ended July 1. That compares with an increase of 25 bcf in the same week last year and a five-year average increase of 60 bcf.

Total working gas in storage as of July 1 stood at 2,311 Bcf, which is 261 below year-ago levels and 322 Bcf below the five-year average, the EIA said.