"Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/European-Natural-Gas-Prices-Climb-As-Nuclear-Output-Drops.html

European Natural Gas Prices Climb As Nuclear Output Drops

By Tsvetana Paraskova - Nov 04, 2022, 7:18 AM CDT

Europe’s benchmark natural gas prices at the Dutch TTF hub were headed for a weekly gain early on Friday, supported by estimates of lower nuclear power output in France and forecasts of upcoming colder weather after a very warm start to the heating season.

Prices began to rise on Thursday after weather forecasts pointed to a colder-than-normal spell coming to northwest Europe by December. Maintenance at some gas export facilities in Norway and France’s EDF revising down its nuclear power output, again, also supported prices on Thursday and early on Friday.

At around 11 a.m. in Amsterdam on Friday, the TTF front-month prices had paired gains after a jump in earlier trade, but they were still poised for a weekly gain, after touching a four-month low in recent weeks.

 

On Thursday, EDF revised down its estimate for the 2022 French nuclear output to 275-285 TWh, compared to the previous estimate of 280-300 TWh.

This lowered estimate takes into account the impact of strikes on maintenance schedules in the autumn of 2022, as well as outage extensions at four nuclear reactors involved in the program of inspections and repairs related to the stress corrosion phenomenon, EDF said in a statement.

The benchmark gas prices fell earlier this week and stayed below $97 (100 euros) per MWh as a warm October has allowed for more injections into storage instead of withdrawals. The comfortable storage levels, the high rate of LNG imports, and the mild weather in October and early November have eased concerns about gas supply and demand balances in the early part of the heating season. In fact, milder weather across most of Europe has postponed the start of the heating season.

While concerns about the next weeks may have been allayed to a large extent, Europe’s gas supply situation remains precarious for next year.

The International Energy Agency (IEA) said on Thursday that “Europe needs to take immediate action to avoid risk of natural gas shortage next year.” Europe could face a gap of as much as 30 billion cubic meters (bcm) of natural gas during the key summer period for refilling its gas storage sites in 2023, the IEA said in a new analysis.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Rise As Bullish Sentiment Builds
• Oil Shortage Forecasts Clash With Grim Economic Projections
• Saudi Arabia Reiterates Commitment To China, Regardless Of U.S. Concerns

[Tom Nolan + 2,443]

https://www.zerohedge.com/commodities/us-natgas-futures-jump-frigid-weather-set-swoop-across-country

US NatGas Futures Jump As Frigid Weather Set To Swoop Across Country

by Tyler Durden

Monday, Nov 07, 2022 - 07:40 AM

US natural gas futures bottomed on Oct. 24 after a 50% haircut on warmer weather. In the last two weeks, prices have staged a rally on the prospect of cold weather and tighter supplies. Last Monday, we penned a note titled "US NatGas Spikes As Temperatures Are About To Dive Nationwide." Now, with colder weather sweeping across the US, NatGas prices are up a staggering 49% in eleven sessions. 

On Monday morning alone, NatGas futures are up 10%. Bloomberg said the move higher is weather-related, "as a winter storm hits the Pacific Northwest and frigid weather is expected across most of the country." 

National Oceanic and Atmospheric Administration released a 6-10 day temperature outlook for the lower 48 states showing that most of the country will experience below-average temperatures. 

An 8-14 day temperature outlook by the weather agency also points to continued below-average temperatures for much of the US. 

After an unseasonably warm end of October and the first week of November, the warm spell is forecasted to turn today. Average temperatures are expected around 58 degrees Fahrenheit and will revert to a downward sloping 30-year mean of the mid-40s by mid-month. 

Colder weather indicates heating demand will rise, and so will the demand for NatGas. 

The latest rally in NatGas outlines how sensitive traders are to potential cold snaps, as below-normal stockpiles and surging exports could strain domestic stockpiles in a deep freeze in the months ahead. 

[Tom Nolan + 2,443]

EXCERPT  - I have argued in a succession of OilPrice articles, here, here, and here, that the era of rapid growth in shale output was coming to an end.

https://oilprice.com/Energy/Energy-General/Is-US-Shale-Production-Peaking.html

Is U.S. Shale Production Peaking?

By David Messler - Nov 07, 2022, 8:00 PM CST

• U.S. shale production is peaking due to declining inventory quality and the inability of the industry to substantially increase drilling.
• Oil companies are beginning to consume Tier I acreage at a greater rate to slow production declines that are bending the curve down.
• This article is 4th in a series detailing the onset of decline in shale production.

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/An-EU-Price-Cap-On-Natural-Gas-Looks-Increasingly-Unlikely.html

An EU Price Cap On Natural Gas Looks Increasingly Unlikely

By Irina Slav - Nov 08, 2022, 2:10 AM CST

[Blackbag99 + 20]

2 hours ago, Tom Nolan said:

https://oilprice.com/Latest-Energy-News/World-News/An-EU-Price-Cap-On-Natural-Gas-Looks-Increasingly-Unlikely.html

An EU Price Cap On Natural Gas Looks Increasingly Unlikely

By Irina Slav - Nov 08, 2022, 2:10 AM CST

Looks more and more likely. The EU doesn't need any gas, It has 800 Billion Cubic Feet more than it did last year. In the 12 months to October Russia provided just 8% of EU gas and In January that drops to 3%.

Sell every rally

[Tom Nolan + 2,443]

Tuesday Nov 8 - REUTERS 8am

https://finance.yahoo.com/news/u-natural-gas-futures-drop-140106104.html

Nov 8 (Reuters) - U.S. natural gas futures fell about 6% on Tuesday in what has already been an extremely volatile couple of weeks on forecasts for warmer weather and lower heating demand through late November than previously expected.

Traders, however, noted that even though the weather will be less cold, it will still be much colder than normal for this time of year during that period. Futures also gained some support from a decline in output so far this month and expectations the Freeport liquefied natural gas (LNG) export plant in Texas would return to service soon.

Freeport LNG submitted a draft Root Cause Failure Analysis to the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) on Nov. 1, according to sources familiar with the filing. The next step is for Freeport LNG to submit a request to resume service. Freeport LNG said it still expects the 2.1 billion-cubic-feet-per-day (bcfd) export plant to return to at least partial service in November following an unexpected shutdown on June 8 caused by a pipeline explosion. Several vessels were lined up to pick up LNG from Freeport, according to Refinitiv data. Prism Brilliance, Prism Diversity and Prism Courage were waiting offshore from the plant, while LNG Rosenrot and Prism Agility were expected in late November.

Futures are likely to be pressured this week by expectations Subtropical Storm Nicole, which was anticipated to strengthen into a hurricane before hitting the West Coast of Florida early Thursday. Traders noted storms usually cause power outages that reduce demand for gas-fired generation.

Front-month gas futures were down 43 cents, or 6.2%, to $6.514 per million British thermal units (mmBtu) at 8:27 a.m. EST (1327 GMT).

On Monday, the contract gained about 9% to settle at its highest since Oct. 6. Rapid price changes over the past couple of weeks - futures gained or lost more than 5% on eight of the past 10 days - boosted the contract's 30-day implied volatility index to its highest since October 2021 for a second day in a row. The market uses implied volatility to estimate likely price changes in the future.

The premium of futures for January over December , meanwhile, was on track to close at a record high of 37 cents per mmBtu as some in the market started to give up on the prospect of extreme cold in December. Overall, gas futures are up about 74% so far this year as much higher global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine.

Gas was trading at $33 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $27 at the Japan Korea Marker (JKM) in Asia.

TOP PRODUCER U.S. gas futures lag far behind global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints and the Freeport LNG outage have prevented the country from exporting more LNG. Data provider Refinitiv said that average gas output in the U.S. Lower 48 states has fallen to 98.4 bcfd so far in November, down from a record 99.4 bcfd in October. Traders, however, noted that early-month output figures are usually revised higher later in the month. With the coming of seasonally colder weather, Refinitiv projected average U.S. gas demand, including exports, would jump from 98.4 bcfd this week to 121.2 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Monday. The average amount of gas flowing to U.S. LNG export plants has risen to 11.6 bcfd so far in November, up from 11.3 bcfd in October.

Week ended Week ended Year ago Five-year Nov 4 Oct 28 Nov 4 average (Forecast) (Actual) Nov 4 U.S. weekly natgas storage change (bcf): +81 +107 +15 +20 U.S. total natgas in storage (bcf): 3,582 3,501 3,617 3,656 U.S. total storage versus 5-year average -2.0% -3.7% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 6.56 6.94 5.12 3.73 2.89 Title Transfer Facility (TTF) 33.52 32.83 27.71 16.04 7.49 Japan Korea Marker (JKM) 27.20 28.93 32.98 18.00 8.95 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year Norm Norm U.S. GFS HDDs 322 326 236 264 272 U.S. GFS CDDs 10 12 11 15 12 U.S. GFS TDDs 332 338 247 279 284 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Week Next Week This Week Five-Year Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 99.1 98.5 98.8 95.7 89.6 U.S. Imports from Canada 7.3 6.4 7.2 8.6 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.4 104.9 105.9 104.3 97.9 U.S. Demand (bcfd) U.S. Exports to Canada 2.6 2.3 2.4 3.0 2.9 U.S. Exports to Mexico 5.4 5.6 5.6 5.5 5.1 U.S. LNG Exports 11.9 11.7 12.2 11.2 6.4 U.S. Commercial 7.9 8.7 14.4 11.1 11.5 U.S. Residential 10.4 12.0 23.4 16.7 17.2 U.S. Power Plant 29.6 28.3 30.2 26.3 26.0 U.S. Industrial 22.6 22.7 25.3 22.4 24.0 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.1 2.1 2.7 2.1 2.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 77.6 78.8 101.0 83.6 85.8 Total U.S. Demand 97.6 98.4 121.2 103.3 100.2 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Nov 11 Nov 4 Oct 28 Oct 21 Oct 14 Wind 16 12 15 11 11 Solar 3 3 3 3 4 Hydro 6 5 5 5 5 Other 3 2 2 3 3 Petroleum 0 0 0 0 0 Natural Gas 37 39 37 39 41 Coal 15 18 18 19 18 Nuclear 21 20 19 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 4.62 4.00 Transco Z6 New York 3.33 0.77 PG&E Citygate 9.15 8.17 Dominion South 2.94 0.63 Chicago Citygate 3.28 1.65 Algonquin Citygate 3.86 0.75 SoCal Citygate 9.40 6.80 Waha Hub 1.31 1.68 AECO 4.00 2.65 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 40.50 33.00 PJM West 47.75 31.75 Ercot North 45.00 21.00 Mid C 92.00 82.00 Palo Verde 66.50 48.25 SP-15 90.50 51.50 (Reporting by Scott DiSavino; Editing by Paul Simao)

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-early-weakness-suggests-overnight-changes-to-cold-forecasts-1188805

Natural Gas Price Fundamental Daily Forecast – Early Weakness Suggests Overnight Changes to Cold Forecasts

By:James Hyerczyk

Updated: Nov 8, 2022, 09:57 UTC

 

U.S. natural gas prices soared about 9% to a one-month high on Monday on forecasts for colder weather and more heating demand.

 

Natural gas futures are trading lower on Tuesday after failing to follow-through to the upside following yesterday’s ‘gap-and-go’ trading session. The price action suggests there may have been a late session change in the weather forecasts. On Monday, prices soared after weekend forecasts called for substantially colder weather and stronger heating demand.

At 09:14 GMT, December natural gas futures are trading $6.524, down $0.420 or -6.05%. On Monday, the United States Natural Gas Fund ETF (UNG) settled at $21.72.

Monday Recap

U.S. natural gas price soared about 9% to a one-month high on Monday on forecasts for colder weather and more heating demand in mid to late November than previous expected.

Traders also said futures were bolstered by a drop in output so far this month and expectations the Freeport liquefied natural gas (LNG) export plant in Texas would return to service soon.

Short-Term Weather Forecast

According to NatGasWeather for November 8 – November 14, “The eastern half of the U.S. will remain warmer than normal through Friday with highs of 60s to 80’s besides the Northeast, where a glancing cool shot will drop highs into the 50s.

The West & Plains will be cool to cold as chilly weather systems sweep through with rain, snow, and highs of 10s to 50s.

Frosty air over the West will spread eastward across the rest of the U.S. Friday-Monday with rain, snow, and frosty lows of minus 10 to 30s, coldest across the Midwest.

Chilly air will also advance into the southern U.S. this weekend with lows of upper 20s to 40s, including Texas.

Overall, low demand through Friday, then increasing to high.”

Early Peek at This Week’s EIA Storage Report

Analysts are predicting another stout increase in this Thursday’s inventory report. Early estimates for the week-ended November 4 submitted to Reuters ranged from injections of 65 Bcf to 105 Bcf, with an average increase of 81 Bcf. That compares with a five-year average build of 20 Bcf.

One more big storage increase could follow, given a mild weather start to the current week.

Daily Forecast

The early price action suggests prices could retreat throughout the session as long as the weather forecasts keep predicting less-cold than they did early Monday. Nonetheless volatility is expected to remain high.

According to the latest data, rapid changes over the past couple of weeks – futures gained or lost over 5% on eight of the past 10 days – boosted the contract’s 30-day implied volatility index to its highest since October 2021.

Additionally, with gas prices up for two weeks in a row, speculators last week cut their net futures and options positions on the New York Mercantile and Intercontinental Exchanges for the first time in three weeks to their lowest since late September, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.

Traders will be watching for a short-term pullback into a value area where new buyers will be waiting. For the longer-term bulls, it’s important for traders to start buying the dips in order to solidify the uptrend with a series of higher bottoms and higher tops.

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

[Tom Nolan + 2,443]

Wed morning 11/9/2022

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-pressured-by-potential-hurricane-demand-destruction-worries-1190131

Natural Gas Price Fundamental Daily Forecast – Pressured by Potential Hurricane Demand Destruction Worries

By:James Hyerczyk

Updated: Nov 9, 2022, 07:05 C

Natural gas traders are tracking Tropical Storm Nicole, which could evolve into a demand-destroying hurricane shortly.

Natural gas futures are down sharply on Wednesday as a tropical storm bears down on Florida, raising concerns over potential power outages and a drop in demand.

Today’s weakness comes on the heels of a nearly 12% drop on Tuesday that was fueled by forecasts calling for less cold weather and lower heating demand through late November than previously expected.

Meanwhile, some traders attributed the excessive selling to unproven rumors that the Freeport liquefied natural gas (LNG) export plant in Texas may not return in November.

At 12:28 GMT, December natural gas futures are trading $5.817, down $0.321 or -5.23%. On Tuesday, the United States Natural Gas Fund ETF (UNG) settled at $20.21, down $1.49 or -6.87%.

Traders Monitoring Approaching Tropical Storm

Natural gas traders along with the National Hurricane Center (NHC) are tracking Tropical Storm Nicole as it gathers strength while approaching Florida. The storm could evolve into a demand-destroying hurricane shortly.

“Hurricane conditions are possible across portions of the coast of southeast and east-central Florida beginning late Wednesday or Wednesday night, where a Hurricane Watch is in effect,” they said.

The storm is expected to deliver chilling air, in addition to the range of hazards inherent in any major weather system, erasing cooling demand in the Southeast, while temperatures elsewhere were forecast to prove largely benign until late this week, according to Natural Gas Intelligence.

Short-Term Weather Outlook

According to NatGasWeather for November 9-15, “The eastern half of the U.S. will remain warmer than normal through Friday with highs of 60s to 80s besides the Northeast today as a glancing cool shot will drop highs into the 50s.

The West & Plains will be cool to cold as chilly weather systems sweep through with rain, snow, and highs of 10s to 50s.

Frosty air over the West will spread eastward across the rest of the U.S. on Friday-Tuesday with rain, snow, and frosty lows of -10s to 30s, coldest across the Midwest.

Chilly air will also advance into the southern U.S. with lows of upper 20s to 40s, including much of Texas.

Overall, low demand through Friday, then increasing to high.”

Daily Forecast

Futures prices are likely to remain under pressure on Wednesday due to forecasts calling for much bigger-than-usual gas storage builds this week and next in the government’s weekly storage report.

Those big inventory builds could boost gas stockpiles to near- or even above normal levels for the first time since January 2022. This would be a major event since most of the year, the market has been underpinned by forecasts calling for a supply deficit at the start of the winter heating season.

One potentially bullish wildcard is the Freeport LNG situation. At this time, the company hasn’t filed any official restart papers with federal regulators. But if and when they do, prices could rise because of increased demand.

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

[Tom Nolan + 2,443]

Wed After market close

US natural gas futures fell to below $5.8/MMBtu, down more than 15% from a 3-week high of nearly $7 hit on November 7th, after demand forecasts for next week were downwardly revised due to warmer weather. Average US gas demand, including exports, is expected to rise to 121.2 bcfd next week from 98.4 bcfd this week, below previous estimates. Prices lately have been supported by falling output and prospects of increased LNG exports. Freeport LNG export facility in Texas, offline since June, is set to resume operations by mid-month, after Berkshire Hathaway Energy's Cove Point LNG plant returned to operations on October 28th. Average gas output in the US Lower 48 states is down to 98.4 bcfd so far in November, from a record 99.4 bcfd in October. Looking ahead, the EIA forecasted US natural gas production to rise to 98.07 bcfd in 2022 from a record of 94.57 bcfd in 2021 and gas consumption to increase to a record high of 88.39 bcfd from 84.01 bcfd, above its estimates in October.

https://tradingeconomics.com/commodity/natural-gas

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/High-LNG-Prices-Have-Sparked-Demand-Destruction-In-India.html

High LNG Prices Have Sparked Demand Destruction In India

By Tsvetana Paraskova - Nov 10, 2022, 3:12 AM CST

• High natural gas prices have damaged industrial demand for LNG in India, with customers switching to oil products and domestic gas.
• The lower demand for LNG means storage levels at import terminals are now nearing capacity.
• Lower demand from India could provide some relief for Europe this winter as it continues to buy up as much LNG as it can.

Join Our Community

India’s industrial gas customers have been buying less LNG from storage sites due to high spot prices, which has sent LNG storage levels at import terminals to near capacity, traders familiar with the situation told Bloomberg on Thursday.     

The very high spot gas prices have resulted in demand destruction for India’s industrial customers who have resorted to alternative fuels such as oil products and domestic supplies of gas, according to the traders.

The lower demand for LNG has created a glut of the imported fuel with some storage tanks full and potentially delaying additional LNG imports into India, Bloomberg’s sources said.

Lower demand from India could be a relief for global LNG prices just as the winter in Europe approaches.

This year, Europe has been outbidding Asian customers as it has scrambled to secure gas supply with very low pipeline imports from Russia. High spot rates for LNG have discouraged many buyers and users of the super-chilled fuel in Asia, including in India.

India could be forced to boost coal production in the face of high LNG import costs, officials told Hindustan Times earlier this week.

India’s LNG import costs surged by 70% to reach $13.4 billion in 2021-22, compared to $7.9 billion in 2020-21, despite the fact that import volumes declined by around 7%.

Between January and August this year, Indian LNG imports plunged by 18%, according to Wood Mackenzie.

“India has reduced LNG usage by 30 to 40% year-on-year in refineries and petrochemical plants. Large-scale industries have replaced LNG with domestic gas, produced in India’s eastern offshore. And other small industries are switching to fuel oil and liquefied petroleum gas (LPG) for heating,” Lucy Cullen, Principal Analyst, APAC Gas & LNG Research at WoodMac, said in September.

India and China saw the largest reductions in LNG consumption as consumers switch to coal and fuel oil in power and non-power sectors, Cullen noted.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Shortage Forecasts Clash With Grim Economic Projections
• Big Oil Is Not Dancing To Government Tunes. Period.
• Is U.S. Shale Production Peaking?

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/EU-Leaders-Accuse-US-Natural-Gas-Producers-Of-Profiteering.html

EU Leaders Accuse U.S. Natural Gas Producers Of Profiteering

By Irina Slav - Nov 09, 2022, 6:00 PM CST

• European leaders are unhappy with natural gas prices.
• Some leaders are insisting that the EU impose a price cap on all natural gas imports, regardless of origin. 
• U.S. LNG has been more expensive than pipeline gas coming from Russia in real terms.

Join Our Community

Last month, France’s president Emmanuel Macron accused the United States of a “double standard” because of the difference between the price at which liquefied natural gas produced in the U.S. sells in Europe and the price at which natural gas sells within the U.S.

“The North American economy is making choices for the sake of attractiveness, which I respect, but they create a double standard,” Macron said, also adding that “they allow state aid going to up to 80% on some sectors while it’s banned here -- you get a double standard.”

He wasn’t alone among European national leaders in being unhappy about gas prices. In fact, as many as 15 leaders were unhappy, and they insisted that the EU imposes a price cap on all natural gas imports, regardless of origin. The idea followed delicate attempts to convince Norway to sell its gas at a discount and equally delicate attempts to convince U.S. producers of the same. Now, the U.S. is striking back at the accusations.

“What’s happening is the companies that hold those long-term contracts with US LNG producers, they’re marking that up and earning that margin in the European market,” Brian Crabtree, an assistant secretary at the Department of Energy, told the Financial Times. “It’s not the US LNG company, it’s basically European-headquartered international oil companies and traders.”

Indeed, producers of liquefied natural gas do not invariably sell their product directly to the consumer, in the face of a country in Europe, for instance, They work with commodity majors such as Vitol and Trafigura, or the supermajors, including BP and Shell.

[NOTE - RESALE... below]

Take Cheniere Energy, the biggest producer of LNG in the United States. Earlier this year, Cheniere inked a long-term sale and purchase deal for its LNG with Chevron. Under the deal, Chevron will buy 2 million LNG from Chevron annually, and then it will sell it on for whatever price it deems fair.

Also this year, Cheniere closed another sales and purchase deal, too, with Norway’s Equinor, this time for an annual volume of 1.75 million tons of LNG. Those 1.75 million tons will also be sold at a price that Equinor sets, not Cheniere. 

This is not to say that LNG producers are not benefiting from the much stronger demand for LNG from Europe. And this is exactly the reason they have been benefiting, in the form of higher profits: demand has surged, and when demand surges, prices follow, especially if supply is not growing as fast as demand. 

Related: Big Oil Is Not Dancing To Government Tunes. Period.

Earlier this month, Cheniere Energy reported twofold revenue and profit growth for the third quarter, thanks to this stronger demand for its product. Separately, the company said it was ready to sign more long-term supply contracts, both with businesses and governments in Europe, which would motivate its planned capacity expansion.

At the same time, BP reported exceptionally strong performance at its gas-trading unit. This was not the case for Shell, however, whose gas-trading division booked a loss of $1 billion for the third quarter of the year because of the spike in European gas prices after the suspension of exports via Nord Stream 1.

Macron’s—and others’—accusations, then, are not exactly founded on facts, with producers being just the first stop in a supply chain that features middlemen that are among the biggest commodity trading businesses in the world. Besides, even in the best of times, U.S. LNG has been more expensive than pipeline gas coming from Russia in real terms.

The reason for this is purely physical. The production of liquefied natural gas is much more complex process than purifying natural gas and sending it down a pipeline. Because LNG production is more complex, it automatically means it is more expensive because it is quite energy—intensive.

Once produced, this gas needs to be transported on tankers that are in short supply as well this year, which has pushed freight rates through the roof, adding to traders’ expenses in shipping the product to customers.

In other words, Europe seems to want businesses to not act as businesses and take every opportunity to make a profit, which is what businesses are all about. But instead of addressing these businesses, many of which are based in Europe, as the DoE’s Crabtree told the FT, it is addressing the federal U.S. government, which has little control over the private sector.

Be that as it may, Crabtree told the FT that the U.S. was committed to helping Europe get enough gas “at a price that is affordable to the continent.” It’s hardly a surprise he did not go into detail on how this affordable price would be achieved. It is also no surprise that his statements to the FT contained a warning.

“So it’s especially concerning to us that the discussion in Europe is being presented as though we have some control over the margins that are being earned on our LNG, because we don’t,” the official said.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Is U.S. Shale Production Peaking?
• Russia Sends Second-Ever Crude Shipment To China Through “Arctic Silk Road”
• Russia’s Oil Output Set To Fall By 1.5 Million Bpd In December

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-traders-bracing-for-another-above-average-eia-storage-build-1192611

Natural Gas Price Fundamental Daily Forecast – Traders Bracing for Another Above Average EIA Storage Build

By:James Hyerczyk

Published: Nov 10, 2022, 06:48 CST

 

The EIA storage report, covering the week-ending November 4, is expected to show another robust build.

Natural gas futures are trading flat on Thursday as investors await the release of the weekly government storage report. It is expected to show another above average build, helping to close the deficit to the 5-year average.

After hitting a one-month high on Monday, the market is now hovering just above a one-week low with bullish traders hoping enough demand can come in before the end of the month to set up conditions for a strong rally this winter.

At 12:04 GMT, December natural gas futures are trading $5.862, down $0.003 or -0.05%. On Wednesday, the United States Natural Gas Fund ETF (UNG) settled at $19.16, down $1.04 or -5.15%.

On Wednesday, the futures market fell about 4% on forecasts for less cold weather in late November amid continued volatility.

Analysts said the market also remained hyper focused on rumors the Freeport liquefied natural gas (LNG) export plant in Texas may not return in November since it has not yet filed its return to service plan with federal regulators, according to Reuters.

Demand for gas is expected to rise once Freeport returns. This will help stabilize prices.

NatGasWeather Predicts Wintry Weather

Looming cold fronts and flat production this week around 99 Bcf/d favored bulls, NatGasWeather noted, with forecasts Wednesday showing a substantial shift toward wintry weather beginning this weekend and extending through the middle of November.

This could help lead to increased demand once Tropical Storm Nicole passes through the Southeast this week. The storm, which is currently pounding Florida, is expected to create some demand destruction.

Energy Information Administration Weekly Storage Report

The EIA will release its weekly storage report at 15:30 GMT on Thursday, covering the week-ending November 4. It is expected to show another robust build.

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.

NGI is also predicting a build of 68 Bcf.

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

Daily Forecast

December natural gas futures are currently trading on the weak side of a short-term technical retracement zone at $6.283 to $6.062. This puts it in a position to move lower with $5.345 the next major target.

The market will have to overtake $6.283 in order to attract enough new buyers to perhaps fuel the next rally.

Prices could also consolidate, building a potentially bullish support base in the process. This is very likely since the fundamentals are out of sync.

Demand is likely to remain weak until the cold weather arrives or the Freeport export plant begins producing liquefied natural gas.

Essentially, there is likely to be a downside bias as long as storage continues to build.

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

[Tom Nolan + 2,443]

Thursday Nov 10 9:30am Reuters

https://finance.yahoo.com/news/1-u-natgas-2-smaller-153214931.html

UPDATE 1-U.S. natgas up 2% on smaller-than-expected storage build, cold weather

Nov 10 (Reuters) - U.S. natural gas futures gained about 2% on Thursday on a smaller-than-expected storage build and forecasts for heating demand to rise next week when the weather turns much colder. Traders also noted prices were up on a possible increase in liquefied natural gas (LNG) exports if the Freeport LNG plant in Texas starts to return to service.

The U.S. Energy Information Administration (EIA) said utilities added 79 billion cubic feet (bcf) of gas to storage during the week ended Nov. 4. That was smaller than the 84-bcf build analysts forecast in a Reuters poll and compares with an increase of 15 bcf in the same week last year and a five-year (2017-2021) average increase of 20 bcf. Analysts said last week's build was bigger than normal because mild weather last week kept demand for the fuel for heating low. They also noted that big builds last week and expected this week could boost stockpiles to near- or above-normal levels for the first time since January.

On Freeport, analysts said the market remained extremely focused on rumors the plant may not return in November since it has not yet filed its return-to-service plan with federal regulators. Demand for gas will rise once the Freeport plant returns. Freeport LNG, however, has said repeatedly that it still expects the 2.1 billion-cubic-feet-per-day (bcfd) export plant to return to at least partial service in November following an unexpected shutdown on June 8 caused by a pipeline explosion. Freeport LNG submitted a draft Root Cause Failure Analysis to the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) on Nov. 1, according to sources familiar with the filing. The next step is for Freeport to submit a request to resume service. A couple of vessels were waiting to pick up LNG from Freeport, according to Refinitiv data. Prism Diversity and Prism Courage were offshore from the plant, while LNG Rosenrot and Prism Agility were expected to arrive in late November. But one vessel, Prism Brilliance, which had been waiting outside the Freeport plant, is now headed toward Corpus Christi where Cheniere Energy Inc has an LNG export plant, according to Refinitiv data.

Traders noted power outages from Hurricane Nicole in Florida, where about 210,000 homes and businesses were without power Thursday morning, reduced the amount of gas electric generators have to burn. That reduction in gas demand helped limit the futures price increase.

Front-month gas futures rose 13.7 cents, or 2.3%, to $6.002 per million British thermal units (mmBtu) at 10:32 a.m. EST (1532 GMT).

EXTREME VOLATILITY Rapid price changes over the past couple of weeks - futures gained or lost more than 5% on eight of the past 10 days - boosted the contract's 30-day implied volatility index to its highest level since hitting a record high in October 2021 for a second day in a row. The market uses implied volatility to estimate likely price changes in the future. Gas futures are up about 62% so far this year as much higher global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine. Gas was trading at $34 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $28 at the Japan Korea Marker (JKM) in Asia.

Data provider Refinitiv said that average gas output in the U.S. Lower 48 states has fallen to 98.6 bcfd so far in November, down from a record 99.4 bcfd in October. With the coming of much colder weather, Refinitiv projected average U.S. gas demand, including exports, would jump from 98.3 bcfd this week to 120.4 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Wednesday.

Week ended Week ended Year ago Five-year Nov 4 Oct 28 Nov 4 average (Actual) (Actual) Nov 4 U.S. weekly natgas storage change (bcf): +79 +107 +15 +20 U.S. total natgas in storage (bcf): 3,580 3,501 3,617 3,656 U.S. total storage versus 5-year average -2.1% -3.7% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 5.92 5.87 5.12 3.73 2.89 Title Transfer Facility (TTF) 32.32 34.03 27.71 16.04 7.49 Japan Korea Marker (JKM) 27.73 27.88 32.98 18.00 8.95 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year Norm Norm U.S. GFS HDDs 351 336 236 264 282 U.S. GFS CDDs 8 10 11 15 11 U.S. GFS TDDs 359 346 247 279 293 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Week Next Week This Week Five-Year Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 99.1 98.7 99.0 95.7 89.6 U.S. Imports from Canada 7.3 6.2 6.8 8.6 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.4 104.9 105.8 104.3 97.9 U.S. Demand (bcfd) U.S. Exports to Canada 2.6 2.3 2.3 3.0 2.9 U.S. Exports to Mexico 5.4 5.7 5.7 5.5 5.1 U.S. LNG Exports 11.9 11.5 11.9 11.2 6.4 U.S. Commercial 7.9 8.5 13.9 11.1 11.5 U.S. Residential 10.4 11.5 22.5 16.7 17.2 U.S. Power Plant 29.6 29.1 31.2 26.3 26.0 U.S. Industrial 22.6 22.6 25.1 22.4 24.0 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.1 2.1 2.7 2.1 2.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 77.6 78.8 100.5 83.6 85.8 Total U.S. Demand 97.6 98.3 120.4 103.3 100.2 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Nov 11 Nov 4 Oct 28 Oct 21 Oct 14 Wind 15 12 15 11 11 Solar 3 3 3 3 4 Hydro 6 5 5 5 5 Other 3 2 2 3 3 Petroleum 0 0 0 0 0 Natural Gas 39 39 37 39 41 Coal 16 18 18 19 18 Nuclear 20 20 19 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 3.46 4.00 Transco Z6 New York 2.22 3.18 PG&E Citygate 8.17 8.36 Dominion South 1.91 3.05 Chicago Citygate 3.46 3.46 Algonquin Citygate 2.37 3.46 SoCal Citygate 8.42 8.37 Waha Hub 2.65 3.21 AECO 3.96 3.96 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 47.25 PJM West 51.00 Ercot North 38.50 Mid C 100.00 Palo Verde 64.00 SP-15 69.75 (Reporting by Scott DiSavino;

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Steep-Discount-On-Russian-LNG-Disappears.html

Steep Discount On Russian LNG Disappears

By Tsvetana Paraskova - Nov 10, 2022, 6:42 AM CST

[Tom Nolan + 2,443]

Blizzard Pounds Plains, Midwest; "Polar Vortex" To Unleash Chill Nationwide

by Tyler Durden

Thursday, Nov 10, 2022 - 05:40 PM

The first blizzard of the 2022-23 winter season is unfolding across the northern Plains and through the upper Midwest today. 

Parts of North and South Dakota and portions of Montana, Minnesota, and Nebraska are in the storm's path. Some areas could experience more than a foot of snow and snowfall rates of up to 2 inches per hour. 

"This will be the first major snowstorm of the season for the northern Plains and the combination of heavy snow, powerful winds and low visibility will result in hazardous travel," AccuWeather senior meteorologist Brian Wimer said.

Blizzard warnings have been posted for much of North Dakota and northern Minnesota. 

Temperatures behind the system will result in much colder weather in the days ahead. US Lower 48 mean temperatures have dove from 58 degrees Fahrenheit earlier this week to a forecasted 39 degrees by November 14. 

Here's what meteorologists at private weather forecasting firm BAMWX are saying about the cold bast:..

https://www.zerohedge.com/weather/blizzard-pounds-plains-midwest-polar-vortex-unleash-chill-nationwide  [IMAGES]

POLAR VORTEX

https://pbs.twimg.com/media/FhMrdPvXgAAjkgp?format=png&name=360x360

https://pbs.twimg.com/media/FhJV8lnWAAAGfla?format=png&name=small

Edited November 11, 2022 by Tom Nolan

[Tom Nolan + 2,443]

Reuters (long detail report)  - Fri, November 11, 2022 at 7:44 AM  https://finance.yahoo.com/news/u-natgas-futures-steady-market-134449461.html

U.S. natgas futures steady as market balances cold forecasts

 

[Tom Nolan + 2,443]

https://www.hellenicshippingnews.com/eia-now-expects-u-s-natural-gas-prices-to-average-above-6-00-mmbtu-this-winter/

11/11/2022

EIA now expects U.S. natural gas prices to average above $6.00/MMBtu this winter

In our November Short-Term Energy Outlook (STEO), we forecast that natural gas spot prices at the U.S. benchmark Henry Hub will average $6.09 per million British thermal units (MMBtu) this winter (November 2022–March 2023), the highest real price since winter 2009–10. Our forecast reflects natural gas storage levels that are 4% below average heading into winter withdrawal season and more demand for liquefied natural gas (LNG) as the Freeport LNG facility comes back online. After the winter, we expect the Henry Hub price to decline in 2023 as production growth outpaces both domestic consumption and LNG exports.

Henry Hub natural gas spot prices reached a peak of $8.80/MMBtu in August. Prices declined to average $5.66/MMBtu in October following a period of strong dry natural gas production and several consecutive weeks of relatively large injections into natural gas storage. Throughout September and October, high volumes of natural gas injections into underground storage reduced the storage deficit to the five-year (2017–21) average from 11% at the end of August to 4% as of October 28.

monthly U.S. henry hub natural gas spot price Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO)

Despite lower Henry Hub spot prices since August, we expect natural gas prices to rise this winter as a result of seasonal demand for natural gas in space heating, which typically peaks in January and February. We expect that higher demand for LNG exports—particularly in the Northern Hemisphere—will also increase natural gas prices. We expect demand for natural gas at LNG export facilities to increase when the Freeport LNG terminal in Texas resumes partial operations in November, after it paused operations in June following a fire.

U.S. dry natural gas production has been increasing throughout 2022 and has averaged more than 98 billion cubic feet per day (Bcf/d) every month since June. We expect dry natural gas production to continue to grow, averaging 99.4 Bcf/d this winter and 99.7 Bcf/d in 2023. We forecast natural gas prices at the Henry Hub will begin to decline in the spring of 2023 as production growth continues and winter demand for heating subsides. For 2023, we forecast the annual Henry Hub price to average $5.46/MMBtu for the year.

[Tom Nolan + 2,443]

1:30 pm central US time - Friday 11/11

US natural gas futures are set to close a volatile week 9% lower at around $5.8/MMBtu, the lowest since November 1st, as temperatures are expected to remain higher than usual next week. Meanwhile, the Freeport LNG export plant has not yet submitted a request to federal safety regulators to resume operations in November after being offline since June, making more gas available for domestic use. Elsewhere, the latest EIA data showed US utilities added 79 bcf of gas to storage last week, below market expectations of an 84 bcf increase and compared with an increase of 15 bcf in the same week last year.

https://tradingeconomics.com/commodity/natural-gas

[Tom Nolan + 2,443]

Friday 11/11 After market close - BLOOMBERG

https://finance.yahoo.com/news/unconfirmed-tweet-freeport-lng-upending-202720435.html

Freeport LNG Says Tweets About Cracked Pipes Are False

(Bloomberg) -- Freeport LNG said a tweet about cracks in pipes at its Texas export terminal, which led to US natural gas futures plummeting Friday, contained false information, as did a letter stating the terminal would restart soon.

Gas futures for December delivery plunged as much as 7.4% on Friday morning after someone identifying themselves as a trader posted on Twitter that “cracked pipes” were discovered at the terminal, potentially delaying the company’s plans to restart exports. The tweet, which has since been deleted, took off after being shared by another Twitter handle that is widely followed by gas traders and analysts.

Shortly after the tweet, a letter falsely attributed to Freeport LNG circulated, stating the report of cracked pipes was false and that a part of the terminal would restart in the immediate future.

“That is NOT a legitimate statement from Freeport LNG,” company spokesperson Heather Browne said by email. The company reiterated in a statement after the gas market closed that it hadn’t made any public comments on Friday regarding the restart of the terminal. In a separate email in response to questions, Browne added that “tweets today contained false information.”

If anything, the Twitter episode lays bear the challenges of verifying market-sensitive information on social media today -- and how extremely volatile natural gas markets have become with winter weather forecasts changing dramatically from one day to the next and more tankers full of US gas bound for Europe.

The Texas terminal has been shut since a fire broke out in June.

21

 

[Tom Nolan + 2,443]

11 minutes ago, Tom Nolan said:

 

 

Twitter spoof contributes to natural-gas price drop; Freeport LNG calls out fake letterhead and ‘false information’ on Twitter

https://finance.yahoo.com/m/22b10f76-4889-3412-acf1-aa62be36fde5/twitter-spoof-contributes-to.html

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-gains-capped-as-traders-await-freeport-lngs-return-to-service-1196396

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

By:James Hyerczyk

Published: Nov 14, 2022, 06:41 CST

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 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.

At 12:14 GMT, January natural gas is trading $6.620, up $0.357 or -5.70%. 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.

[Tom Nolan + 2,443]

Monday 11/14/2022 BLOOMBERG

https://finance.yahoo.com/news/major-us-lng-exporter-may-184610271.html

Major US LNG Exporter May Extend Texas Plant Outage Through December

~~~~~~~~~~~~~~

https://www.zerohedge.com/commodities/freeport-dismisses-reopening-claims-twitter-sends-us-natgas-prices-higher

US NatGas Tumbles On Bloomberg Report That Freeport LNG May Extend Plant Outage

by Tyler Durden

Monday, Nov 14, 2022 - 12:36 PM

Update (1336ET):

Now Bloomberg reports Freeport LNG told customers that outages at its Texas terminal, which has been closed since June and was scheduled to reopen by mid-November, could be delayed further. 

People with direct knowledge of the situation said LNG shipments for November and December are likely to be canceled as maintenance work continues on the liquefaction plant. Also, regulatory approvals could prolong the start date.

This comes as heating demand is set to surge across the Northern Hemisphere. The LNG export facility in Freeport, Texas, accounted for 15% of all US LNG exports, most of which were sent to Europe. 

Freeport said last week it was set to resume operations this month, though reliable timelines from the company have been hard to get, according to the people.  

Last Friday, US natural gas prices plunged after rumors circulated on social media about possible restart delays at Freeport. Then the company denied Twitter rumors late Friday which sent US Natgas prices higher early Monday to only plunge again, with now Bloomberg reporting possible restart delays. 

This is more bad news for Europe as the energy-stricken continent has to search elsewhere for LNG shipments. On the flip side, more NatGas will be injected into US storage ahead of winter. 

*  *  * 

Freeport LNG, a major liquefied natural gas exporter in Texas, rejected claims made on social media last Friday that its terminal would be closed for an extended period. 

US natural gas futures plunged as much as 7.4% on Friday as someone operating a Twitter account, identifying as a trader, said "cracked pipes" were discovered at the terminal, potentially delaying the company's plans to restart exports by mid-month. The tweet was immediately deleted. 

"That speculation ratcheted up sharply Friday morning, when a Twitter account, @Lithium_Plays, made several unconfirmed statements regarding Freeport that were widely shared by other Twitter accounts, including a top, so-called energy Twitter influencer, an oil analyst for a major international bank whose account has 64,000 followers. But those tweets by @Lithium_Plays were then quickly deleted. 

Shortly thereafter, another account, @rr9b250, Tweeted a screenshot that seemed to look like it came directly from Freeport LNG, as it was on Freeport LNG letterhead with the same logo colors that one sees on Freeport's official website. The statement ended with "Sincerely, Freeport LNG Public Relations."" --Market Watch

After US NatGas futures settled, Freeport released a statement Friday evening, rejecting such claims calling it fake news:

"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, official public information from Freeport LNG," the company said in a statement. 

On Monday morning, US natural gas futures jumped more than 5.5% to as high as $6.25/mmbtu on Freeport dismissing reopening claims. 

The Texas terminal has been shuttered since June due to an explosion, with a reopening timeframe around mid-November. Any such reopening would boost NatGas prices because the liquefaction plant serves as a major export facility, serving European customers.

It seems like traders have an issue verifying market-sensitive information on social media... 

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Freeport-LNG-May-Remain-Shut-Down-Until-2023.html

Freeport LNG May Remain Shut Down Until 2023

By Irina Slav - Nov 15, 2022, 2:15 AM CST

The Freeport LNG facility could remain out of commission until the end of the year as work on the repairs after the blast that shut it down in June continued.

Bloomberg cited unnamed sources as saying Freeport had told its clients it would not be able to ship any cargoes scheduled for this and next month because repairs were not done.

Houston-based Freeport LNG suffered an explosion on June 8, which caused the plant to shut down to assess the damage and perform repairs. Freeport LNG accounts for 20% of the United States' total LNG export capacity, capable of processing 2.1 billion cubic feet of gas per day. According to Freeport LNG, it is the seventh-largest liquefaction facility in the world and the second-largest in the United States.

The explosion that prompted the suspension of operations came at a most unfortunate time for the European Union which increased its imports of U.S. liquefied gas considerably following Russia’s invasion of Ukraine and the reduction of gas flows to Europe.

There were hopes that Freeport LNG would be back up and running before this year’s end to help stabilize supply and hold prices down, but the latest update will likely extinguish those hope.

Initially, Freeport said the repairs would be done by September but has since then delayed the restart of operations a couple of times. The company also needs to receive the green light from the energy authorities before it can restart operations.

“Our work of progressing towards the restart of our liquefaction facility continues. That work includes obtaining the necessary regulatory approvals required for the restart of our facility,” a spokeswoman for the company told Bloomberg.

Right now, LNG prices are on the decline due to a temporary oversupply ahead of the start of winter in the northern hemisphere, Bloomberg noted in its report, but the news of Freeport’s extended shutdown could change that.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Biden Stresses The Importance Of Cooperation With China Following Xi Meeting
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[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-stabilizing-amid-advancing-cold-front-freeport-uncertainty-1191815

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

By:James Hyerczyk

Published: Nov 15, 2022, 06:57 CST

Both major weather models showed widespread freezing conditions through this week and into next before returning to seasonal norms late next week.

 

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.

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

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-rangebound-amid-freeport-lng-uncertainty-1199978

Natural Gas Price Fundamental Daily Forecast – Rangebound Amid Freeport LNG Uncertainty

By:James Hyerczyk

Published: Nov 16, 2022, 07:24 CST

Trying to predict when Freeport LNG will restart is very risky. But once it begins, the jump in demand should trigger a strong upside breakout.

Natural gas futures are edging lower on Wednesday as traders shrugged off forecasts calling for colder weather and more heating demand next week than previous estimated. Nonetheless, worries that Freeport LNG would delay the restart of its liquefied natural gas (LNG) export plant in Texas continued to cap prices.

At 12:49 GMT, January natural gas futures are trading $6.303, down $0.092 or -1.44%. On Tuesday, the United States Natural Gas Fund ETF (UNG) settled at $19.77, up $0.25 or +1.25%.

Lack of Clarity from Freeport LNG Continues to Weigh on Prices

According to reports, Freeport LNG as of late Tuesday, had not submitted a request to resume service to the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). This has led many market observers to believe that the plant will not return until December at the earliest.

Adding further to the confusion was a Bloomberg report from Monday that said the export facility had told LNG buyers it would likely cancel shipments scheduled for this month and December because of ongoing repair work and unsecured regulatory approval.

Natural Gas Intelligence (NGI) wrote overnight, “Without an updated timeline from Freeport LNG officials, the news spawned ongoing speculation among market participants that the facility’s return may not happen until early 2023. If this were to bear out, it would keep more gas at home, further fortify U.S. supplies and help offset concerns about meeting demand even if the Lower 48 winter proves harsh or exceptionally long.”

“From a raw fundamental perspective, a two-month delay in the 2.0 Bcf/d facility would equate to 120 Bcf – largely offsetting the 135 Bcf bullish weather shift over the past 10 days,” EBW Analytics Group analyst Eli Rubin said Tuesday.

Early EIA Weekly Storage Report Estimates

Thursday’s U.S. Energy Information Administration (EIA) weekly storage report is expected to show another relatively fat storage build.

NGI is reporting that early estimates for the week ended Nov. 11 submitted to Bloomberg ranged from 60 Bcf to 72 Bcf, with a median of 66 Bcf. Preliminary results of a Reuters’ poll landed at an average of 64 Bcf and spanned 51 Bcf to 78 Bcf.

These estimates compare with an injection of 23 Bcf a year earlier and a five-year average withdrawal of 5 Bcf.

Short-Term Outlook

We could see another day or two of sideways, rangebound trading until the release of Thursday’s EIA report.

Trying to predict when Freeport LNG will restart is very difficult and risky. But once the announcement is made, the jump in demand should trigger a strong upside breakout.

In the meantime, the weather forecasts and the storage report will guide the price action.

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