NEW YORK: US natural gas futures edged up about 3% to a one-week high on Thursday as forecasts continued to call for colder weather and higher heating demand next week.
Prices increased despite forecasts for warmer weather and lower heating demand in two weeks than previously expected and a federal storage report expected to show a much bigger-than-usual storage build last week when the weather was still mild and heating demand low.
Analysts forecast US utilities added 63 billion cubic feet (bcf) of gas to storage during the week ended Nov. 11. That compares with an increase of 23 bcf in the same week last year and a five-year (2017-2021) average decline of 5 bcf.
If correct, last week’s increase would push stockpiles to 3.643 trillion cubic feet (tcf), or 0.2% below the five-year average of 3.651 tcf for this time of the year. If last week’s build turns out to be bigger than expected, it could push storage over the five-year norm for the first time since January.
Some traders said they were surprised US gas prices were on track to rise for a fourth day in a row despite widespread expectations Freeport LNG will delay the restart of its liquefied natural gas (LNG) export plant in Texas to December or later.
In recent days, a couple of LNG vessels that were either heading for Freeport (LNG Rosenrot) or had waited outside the plant (Prism Brilliance) have moved onto other ports.
LNG Rosenrot is now headed for Gibraltar, while Prism Brilliance is sitting outside Corpus Christi in Texas where Cheniere Energy Inc has an LNG export plant, according to ship tracking data from Refinitiv.
Federal pipeline safety regulators released a heavily redacted consultant’s report this week blaming inadequate operating and testing procedures, human error and fatigue for the June 8 explosion that shut the Freeport LNG plant.
Sources familiar with Freeport LNG’s filings with federal regulators said that as of Wednesday morning the company had not yet submitted a request to resume service to the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). Many analysts said that means the plant will not return to service until December at the earliest.
Until late last week, Freeport LNG had said repeatedly the plant remained on track to return to service in November. In comments made in recent days, however, the company did not mention a restart date.
Front-month gas futures were up 15.3 cents, or 2.5%, to $6.353 per million British thermal units (mmBtu) at 8:42 a.m. EST (1342 GMT), putting the contract on track for its highest close since Nov. 7.