Natural Gas Price Prediction – Prices Move Towards The High End Of The Range

Key Insights

• Working gas in storage increased by 44 Bcf, mostly in line with historical data for this time of the year.
• Freeport LNG has recently retracted force majeure, which served as a bullish catalyst for natural gas markets. 
• In Europe, energy crisis pushes natural gas prices to new highs and ensures that U.S. exports will increase immediately when Freeport LNG is back to work. 

Natural Gas Markets Stay Strong After The Release Of The EIA Report

Natural gas prices are moving higher after the release of the EIA Weekly Natural Gas Storage report. The report indicated that working gas in storage increased by 44 Bcf from the previous week, compared to analyst consensus of 39 Bcf.

The report was mostly in line with analyst estimates and historical data for this time of the year. Given the problems with LNG exports due to the explosion at Freeport LNG, the report higlights the strong demand for natural gas.

Traders remain focused on Freeport LNG decision to retract force majeure, which could lead to significant losses for natural gas buyers. The force majerue was declared back at the beginning of June. Currently, the partial restart of the operation is expected to take place in October.

European Natural Gas Markets Test Weekly Highs

In Europe, natural gas prices tested weekly highs as hot weather and low levels of water in rivers fueled fears of energy shortage.

At this point, problems at Europe have little impact on U.S. natural gas markets as Freeport LNG is not working. However, the recent developments indicate that LNG prices in Europe and Asia will remain sky-high for months to come.

Thus, U.S. producers will increase exports when Freeport LNG gets back to work, which will be bullish for domestic natural gas markets.

Meanwhile, U.S. natural gas prices are stuck in the $7.50 – $8.50 range. If natural gas prices manage to settle above the $8.50 level, they may quickly move towards $9.00.

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