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FXEmpire.com –
Key Takeaways
- U.S. natural gas futures rebounded on Friday due to forecasts indicating that colder-than-normal weather will persist for the next two weeks, leading to higher demand for heating.
- The expected record high in gas flow to liquefied natural gas (LNG) export plants in March, following the reopening of Freeport LNG’s export plant in Texas after an eight-month outage in February, also drove the price surge.
- Meteorologists predict colder-than-normal weather in the Lower 48 states through April 8, but Refinitiv forecasts a decline in US gas demand, including exports, as spring approaches.
Overview
After hitting a one-month low in the previous session, U.S. natural gas futures rebounded on Friday due to forecasts indicating that colder-than-normal weather will persist for the next two weeks.
This will result in a higher demand for heating, which is expected to continue until early April.
May Natural Gas futures closed at $2.361, marking an increase of $0.078 or 3.42%. Similarly, the United States Natural Gas Fund ETF (UNG) finished at $7.33, up $0.15 or 2.09%.
The price surge was also driven by the expected record high in gas flow to liquefied natural gas (LNG) export plants in March, following the reopening of Freeport LNG’s export plant in Texas after an eight-month outage in February.
Daily May Natural Gas
Freeport LNG’s Export Plant Receives Increased Gas Flow Amid Production Delays
Freeport LNG’s export plant is expected to receive 1.6 bcfd of gas on Friday, which is up from 1.5 bcfd on Thursday, according to Refinitiv data. However, the company is canceling some cargoes due to issues with one of its liquefaction trains, which may delay its return to full service. The facility can convert 2.1 bcfd of gas into LNG at maximum capacity.
In March, total gas flows to all seven of the large U.S. LNG export plants increased to 13.1 bcfd, and this is expected to exceed the monthly record set in March 2022. These seven plants, including Freeport LNG, have the capacity to convert about 13.8 bcfd of gas into LNG.
US Lower 48 States’ March Gas Output Rises to 98.4 bcfd, Still Below Monthly Record: Refinitiv
Gas output in the US Lower 48 states rose to an average of 98.4 bcfd in March, up from 98.1 bcfd in February but below the record of 99.9 bcfd in November 2022, according to Refinitiv data.
The decline in production earlier this year was due to gas price drops in December and January, which led energy firms to reduce their drilling activity, as well as extreme cold in early February and late December that froze some oil and gas wells in multiple producing basins.
Refinitiv Forecasts Decline in US Gas Demand as Spring Approaches Despite Cold Weather Prediction
Meteorologists predict colder-than-normal weather in the Lower 48 states through April 8, but Refinitiv forecasts a decline in US gas demand, including exports, as spring approaches. Gas stockpiles remain about 23% above their five-year average, and are expected to end about 20% above normal during the colder-than-normal week ended March 24.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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