FX.co ★ US Natgas Prices Tumble 7%

U.S. natural gas futures experienced a significant decline of over 7%, reaching approximately $3.17 per MMBtu, approaching their lowest levels since October 17. This decrease is largely attributed to uncertainties surrounding the reduced gas flows to LNG export facilities. A notable factor in the price drop was the diminished demand from Freeport LNG in Texas, where gas intake drastically fell to 0.7 billion cubic feet per day (bcfd) on Tuesday. Nevertheless, there was an indication of recovery, with deliveries to Freeport climbing to around 1.4 bcfd on Wednesday, though still short of the recent average of 1.9 bcfd. When fully operational, the plant's three liquefaction trains have the capacity to process up to 2.4 bcfd. Weather forecasts remain favorable for natural gas, with colder-than-normal temperatures projected across much of the U.S. through January 28, which could potentially increase heating demand later in the month. On the supply front, domestic production has seen a slight decline, averaging 109.4 bcfd in January, down from December’s record high.