- NATGAS rebounds after huge declines
- Last week, the price posted a 12% increase, the highest 5-day gain since October 2022
- Freeport terminal volume growth supports futures prices
Thanks to the perspective of rising demand, natural gas futures today extended last week's gains ignoring the slowdown at Cheniere (LNG.US) US processing facilities. LNG volumes flowing into the long-defunct Freeport LNG terminal rose above 0.7 Bcf/d, setting new highs since the facility was shut down last year, and analysts expect further increases. According to EBW Analytics Group, the amount of negativity contained in gas prices, including warm weather, is slowly beginning to recede in the face of the return of Freeport LNG demand and the passing of the 'warm winter'. Analysts at Tudor-Pickering-Holt & Co (TPH) estimate that volumes at Freeport will increase to around 2 Bcf/d in the coming weeks or months, caveating, however, that regulatory approval will be needed to restart the last of the plant's targeted three lines.
Volume gains at Freeport are offset for the moment by declines at Corpus Christi, where volumes at the end of last week fell below 1.2 Bcf/d compared to an average of about 2.4 Bcf/d two weeks ago. The Energy Information Administration reported Thursday that 71 Bcf was withdrawn from U.S. natural gas storage facilities in the week ended February 17. The result was higher than expected, but well short of the five-year average of 177 Bcf. The total amount of gas in underground storage was 2,195 billion cubic feet (Bcf), more than 15% higher than the 5-year average according to the EIA. TPH analysts expect EIA to withdraw only about 60 bcf next week, and estimate that after a 'weather correction,' oversupply reached 1 Bcf/d last week after hovering at 5 Bcf/d 2 weeks ago.
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NATGAS, H4 interval. The price of gas is trying to reverse the trend after overcoming the SMA100 (black line), bulls will want to break above the SMA200 (red line), the overcoming of which may open the way to the 23.6 Fibonacci retracement (about $4) later in the year. Source: xStation5
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