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U.S. natural gas futures fell Wednesday on forecasts of lower-than-previously expected demand over the next two weeks and plans for an extended outage of two liquefaction trains at the Freeport LNG export facility in Texas .
Freeport LNG said so it expects two of three trains at its plant to remain out of service for testing and repairs until May, as well as maintenance from late January following a freeze in Texas that caused problems with one of the trains.
Once maintenance work is completed, Freeport LNG said its production capacity will increase 10% from 15 million tonnes/year to around 16.5 million tonnes/year by June
The company also said Freeport LNG Train 4, which has received all necessary regulatory approvals, will add another 25% of LNG production capacity when it becomes operational.
Nymex first month natural gas (NG1:COM) closed for April delivery -2.6% to $1,699/oz, up nearly 8% from the 52-week low of $1,576/oz hit on Feb. 20, but down nearly a third year to date.
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Data firm LSEG said gas production in the lower 48 states has fallen to an average of 100.3 billion cf/d so far in March, down from 104.1 billion cf/d in February and a monthly record of 105.5 billion cf/d in December 2023. .
Weather forecasts in the lower 48 states call for mostly colder-than-normal temperatures through March 24 before becoming near-normal during March 25 through April 4.
According to a survey conducted by The Wall Street Journalwhich would increase the surplus compared to the five-year average compared to the 629 billion of the previous week.
“While another bullish EIA report is possible tomorrow, the overwhelming challenge of extracting an above-normal 900 billion cubic meters from North American gas supplies will likely suppress upside in the short to medium term,” writes Eli Rubin of EBW Analytics.