Natgas gains on view for slightly cooler temps; Freeport LNG unit to shut for a month

U.S. natural gas futures jumped to the highest in more than a week Friday on forecasts for higher upcoming demand when the weather is expected to turn slightly cooler and with the slow return of production from last week’s cold blast.

Weather forecasts for the Lower 48 states expect temperatures will remain warmer than normal from now through at least February 10, but the outlook for the week of February 4 is slightly cooler than for the week of January 28.

Financial data firm LSEG sees U.S. gas demand in the Lower 48 including exports dropping from 144.6B cf/day this week to 124.9B cf/day next week when the weather is expected to turn warmer, before rising to 127.8B cf/day in two weeks as the weather turns cooler.

However, with strong production, season-to-date heating degree days 3% below year-ago levels and 5% below the five-year average, and the temperature forecast skewing above average across most of the U.S. through the first week of February, there is “likely little upside left” in natural gas prices this winter, Troy Vincent, senior market analyst at DTN, told MarketWatch.

Front-month Nymex natural gas (NG1:COM) for February delivery closed Friday +5.5% to $2.712/MMBtu, its best level since January 17 and capping a 7.6% gain for the week.

ETFs: (NYSEARCA:UNG), (BOIL), (KOLD), (UNL), (FCG)

Energy firm Freeport LNG said Friday it expects one of three liquefaction units at its Texas plant will be out of service for about a month following a technical issue during last week’s extreme cold.

The shutdown is the latest of several incidents at the plant since it exited an eight-month outage from June 2022 to February 2023 following a fire and explosion.

Each of the three liquefaction trains at Freeport can turn ~700M cf/day of natural gas into liquefied natural gas.