NEW YORK: US natural gas futures slid about 2% on Wednesday from a one-month high in the prior session on forecasts for less cold weather and lower heating demand next week than previously expected.
That price decline came despite a monthly drop in gas output in February and an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants to near record highs as Freeport LNG’s export plant in Texas pulled in more gas after exiting an outage caused by a fire in June 2022.
Front-month gas futures for April delivery fell 4.4 cents, or 1.6%, to $2.703 per million British thermal units at 9:00 a.m. EST (1400 GMT). On Tuesday, the contract closed at its highest since Jan. 27 for a second day in a row.
Freeport LNG, the second-biggest US LNG export plant, was on track to pull in more than 0.8 billion cubic feet per day (bcfd) of gas from pipelines for a fourth day in a row on Wednesday, according to data provider Refinitiv. When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export.
Freeport LNG said last week that it could be consuming about 2.0 bcfd of feedgas “over the next several weeks.” Some analysts, however, have said Freeport LNG will likely not return to full capacity until the end of April.
Federal regulators have already approved the restart of two of Freeport LNG’s three liquefaction trains (Trains 2 and 3). Liquefaction trains turn gas into LNG. On Monday, Freeport LNG asked regulators for permission to restart the third (Train 1).
Comments
Comments are closed.