Natural Gas Price Fundamental Daily Forecast – Supported by Potential Cold Snap Demand, Rising LNG Exports

Natural gas prices are flat on Wednesday with the market still showing signs of consolidation as the reopening of the previously shutdown Freeport LNG export terminal appears to have stopped the selling pressure.

The market is also being supported by the potential for another cold snap to arrive in the U.S. before the end of the month that may be spooking some of the weaker shorts to square positions and book profits.

At 11:16 GMT, April natural gas is trading $2.653, up $0.001 or +0.04%. On Tuesday, the United States Natural Gas Fund ETF (UNG) settled at $8.86, up $0.53 or +6.36%.

Partial Return of Freeport LNG Boosts Exports

April natural gas futures jumped slightly more than 6% on Tuesday as the amount of gas going to liquefied natural gas (LNG) export plants jumped to a 10-month high with a rapid increase in gas flows to Freeport LNG’s export plant in Texas.

The amount of gas flowing to U.S. LNG export plants was on track to reach 13.5 billion cubic feet per day (bcfd) on Tuesday, the highest since March 2022, as Freeport LNG pulled in more gas after restarting a liquefaction train in test mode as it prepares to exit an eight-month outage caused by a fire in June 2022.

The price action is being driven by short-covering at this early stage of the Freeport reopening. The real buying could start when the facility is operating a near or full capacity. When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export.

But energy regulators and analysts, however, have said they do not expect Freeport LNG to return to full commercial operation until mid-March or later.

Short-Term Weather Outlook

According to NatGasWeather for February 15-21, “A warm pattern will rule much of the eastern ½ of the U.S. through Thursday with highs of 50s to 80s for very light national demand.

A chilly weather system with rain and snow will arrive over the central US today with lows of -0s to 30s, then advancing into the East Friday-Saturday for strong national demand.”

Looking Ahead to Thursday’s EIA Storage Report

Natural Gas Intelligence (NGI) released an early look at Thursday’s Energy Information Administration’s (EIA) weekly storage report late Tuesday.

“Estimates ahead of this week’s Energy Information Administration (EIA) storage report are calling for a smaller-than-normal withdrawal covering the week ending Feb. 10 given the mild weather across much of the United States. With another warm week this week, analysts expect storage surpluses to swell further this month.

Total working gas in storage as of Feb. 3 stood at 2,366 Bcf, which is 233 Bcf higher than a year-ago and 117 Bcf below the five-year average, according to EIA.