U.S Natural Gas Analysis – February-7-2024

NATGAS – Natural gas futures in the U.S. have dropped over 2% to reach $2.0 per million British thermal units (MMBtu). This is a notable low, which hasn’t been seen since April of the previous year. This decline is happening as natural gas production starts picking back up. This production increase comes after gas well operations were temporarily halted in the middle of January due to freezing weather. The bump in production signals a recovery from the recent disruptions caused by the cold snap.

U.S. Natural Gas Analysis 4-Hour Chart

Demand and Weather Outlook

Looking ahead, the demand for natural gas appears lower than earlier forecasts. Weather predictions play a significant role in this, suggesting that we will see temperatures staying warmer than usual until February 13. After that, it’s expected that the weather will return to normal for the time of year from February 15 to February 21. This warmer weather means people and businesses will likely use less heating, reducing the demand for natural gas.

Supply Challenges and Exports

On the supply side, there’s a hiccup in getting natural gas to where it’s exported from the U.S. This is mainly because of ongoing technical issues at the Freeport LNG export plant in Texas. These problems are significant enough that the amount of natural gas fed into U.S. liquefied natural gas (LNG) export facilities is not expected to hit record highs again until the middle of February.

This is when the Freeport plant is anticipated to be back up and running at total capacity. These export constraints add another layer of complexity to the natural gas market, affecting supply levels and prices.