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Natural Gas Price Fundamental Daily Forecast – Gains Capped as Traders Await Freeport LNG’s Return to Service

By:
James Hyerczyk
Updated: Nov 14, 2022, 15:34 UTC

It’s going to take clarity about the Freeport LNG situation to trigger a strong rally and perhaps a breakout to the upside.

Natural Gas

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Natural gas futures are edging lower on Monday as prices continue to consolidate while traders decipher a mixed weather outlook and wait for clarity on the reopening of the Freeport LNG facility. Prices are also being supported by last week’s lighter-than-expected storage injection.

On Friday, the United States Natural Gas Fund ETF (UNG) settled at $19.17, down $0.71 or -3.57%.

Short-Term Weather Outlook

NatGasWeather is looking for “colder than normal temperatures on Monday that will cover most of the US this week with rain, snow, and frost highs of 0s to 40s across the northern US, lows of -10s to 20s.

The southern US will be cool to nice with highs of 40s to 60s, lows of 20s and 30s besides 40s in the far southern US. Overall, high to very high national demand the next 7-days.”

US Energy Information Administration Weekly Storage Report

The US Energy Information Administration (EIA) reported on Thursday that domestic natural-gas supplies rose by 79 billion cubic feet (Bcf) for the week ended Nov. 4. That compared with an average analyst forecast for an increase of 82 Bcf, according to a survey conducted by S&P Global Commodity Insights.

According to Natural Gas Intelligence (NGI), estimates submitted to Reuters ranged from injections of 75 Bcf to 101 Bcf, with a median increase of 83 Bcf. Results of Bloomberg’s survey spanned 66 Bcf to 101 Bcf and landed at a median of 83 Bcf.

The estimates compared with a five-year average build of 20 Bcf. In the comparable week of 2021, the EIA printed a 15 Bcf increase.

Total working gas stocks in storage stand at 3.580 trillion cubic feet (Tcf), down 37 Bcf from a year ago and 76 Bcf below the five-year average, the government said.

Short-Term Outlook

The upcoming cold snap could provide enough support to keep the natural gas market underpinned, but it’s going to take clarity about the Freeport LNG situation to trigger a strong rally and perhaps a breakout to the upside.

Helping to keep a lid on prices is the fact that a return of Freeport LNG operations slated for this month remains in doubt. According to reports, the company has yet to secure all regulatory approvals, making it nearly impossible to predict when additional demand will hit the market.

“I think it’ll (Freeport LNG outage) keep the market from taking off to the upside in a big way,” said Marex North America LLC’s Steve Blair.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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