Natural Gas Price Fundamental Daily Forecast – Stabilizing Amid Advancing Cold Front, Freeport Uncertainty

Natural gas futures are edging higher on Tuesday while consolidating for a fifth straight session on expectations that Freeport LNG will delay the restart of its liquefied natural gas (LNG) export plant in Texas from November to December.

In addition to the volatility fueled by the Freeport situation, traders told Reuters that conditions are likely to remain underpinned due to forecasts calling for colder weather and higher heating demand than previously expected through the end of November.

At 12:21 GMT, December natural gas futures are trading $6.404, up 0.105 or +1.67%. On Monday, the United States Natural Gas Fund ETF (UNG) settled at $19.53, up $0.37 or +1.93%.

Traders Closely Monitoring Freeport LNG

Sources familiar with Freeport LNG’s filings with federal safety regulators told Reuters on Monday that the company has not yet submitted a request to resume service to the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA).

Until late last week, Freeport said repeatedly that the plant, which shut after an explosion on June 8, was on track to return in November. The company, however, did not mention a November restart (or any restart date) in comments made on Friday or Monday.

Natural Gas Intelligence (NGI) reported on Monday that LNG put out a statement responding to ‘false information circulated’ about ‘the restart of Freeport LNG’s liquefaction facility.’

Freeport said it had not made any public statements on the timing of the highly anticipated return to service for the 2 Bcf/d export terminal, seemingly leaving a potential November relaunch on the table. The company warned that ‘any Tweets and/or posts on Freeport LNG branded letterhead that may have been obtained or published, are reporting false information and are not legitimate.’

Colder Weather is Coming

According to NatGasWeather, both the American and European weather models showed widespread freezing conditions through this week and into next before returning to seasonal norms around the Thanksgiving holiday.

Short-Term Outlook

While natural gas futures could edge higher on the weather forecasts alone, traders are going to have to brace for volatility in either direction because of the uncertainty surrounding Freeport LNG.

EBW Analytics Group senior analyst Eli Rubin said, “While natural gas may probe higher near-term, any announcement regarding an updated timetable for Freeport LNG’s return could deliver a price shock in either direction.”

If Freeport announces a late November restart date then look for prices to rally sharply higher. If Freeport pushes the restart into December then prices could fall hard.