Natural Gas Edges Higher at Mid-Session on Short-Covering and LNG Strength
March Natural Gas prices moved up slightly at the mid-session on Friday as they found support after failing to take out Wednesday’s low. It appears that short sellers were covering ahead of the weekend and because prices just stopped going down. In addition to covering the short positions, traders are also looking at weather forecasts and the increased number of LNG terminals expected to be operational by early March.
Cold Snap Expected Saturday Through Tuesday, Driving High Demand Across the Eastern U.S.
The eastern U.S. will experience a cold snap on the weekend and early next week, with minimum temperatures expected in the single digits and 20s over most of the region. Overall demand for natural gas will be very high during this period of extreme cold weather.
LNG Export Flows Near Record Levels, Setting a Firm Floor Under Prices
A major component of today’s bullish narrative around the natural gas market is the high level of foreign exports. These enormous volumes of exports provided this current price foundation and will continue to provide this support through the spring and summer months.
Golden Pass LNG Normalizing as Permian Lateral Gets the Green Light
The activity at Golden Pass LNG is returning to normal as federal regulators have authorized its lateral connection to the Trident Intrastate Pipeline. This new 1.1-mile connection will allow for up to 1 billion cubic feet per day (Bcf/d) of natural gas from the Permian Basin to be brought into the terminal and create significant opportunities for long-term exports.
Asian Demand Driving U.S. LNG Export Rebound the Week of February 16
Rising demand in Asia is also helping to support the increase in U.S. LNG exports, with South Korea demand expected to rise in volume by approximately six to seven cargoes week-over-week during the week of February 16.
Natural Gas Price Forecast
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See all Natural Gas forecastsExport Demand Now Rivaling Weather as the Market’s Primary Catalyst
Key point from this week’s report include the bearish shift in weather due to warmer forecasts, along with the bullish structural support created by recent increases in LNG exports. The market is also currently transitioning into the shoulder season when demand is expected to be soft. However, the currently strong market for export demand has now become a near equal driver of market prices compared to weather.
More Information in our Economic Calendar.
