Natural Gas Price Fundamental Daily Forecast – Jump in LNG Exports, Colder Temps, Fuel Price Surge
Natural gas futures are trading higher at the mid-session on Tuesday after reports that liquefied natural gas (LNG) facilities along the Louisiana coast appear to be ready to ramp-up production. LNG feed gas demand climbed to 8.5 Bcf/d in early morning estimates from Bespoke Weather Services.
“Despite all of the potential issues we heard about the last few days, it is full steam ahead for LNG…and we received word late yesterday that even Cameron would be receiving a tanker to load up, even though the rock barge” obstructing the Calcasieu Ship Channel “has not been cleared,” Bespoke said.
At 15:36 GMT, December natural gas futures are trading $3.320, up $0.040 or +1.22%.
“With other empty tankers waiting offshore, LNG feed gas flows are likely to ramp up rapidly, providing a much needed boost to natural gas prices and driving futures higher,” the EBW analysts said.
Nearby Futures Contract on Track for 20-month High on Rising Exports, Cold Weather
Nearby natural gas futures are soaring nearly 5% and were on track for their highest close in 20 months on Tuesday on rising LNG exports and forecasts for colder weather and more heating demand over the next two weeks than previously expected.
The amount of gas flowing to LNG export plants has averaged 6.9 Bcfd so far in October, up from 5.7 bcfd in September.
That would be the most LNG exports in a month since April and puts exports on track to rise for a third month in a row for the first time since February when feed gas hit a record 8.7 bcfd as rising global gas prices prompted buyers to reverse cargo cancellations.
U.S. exports fell from March to July as coronavirus-related demand destruction caused prices in Europe and Asia to collapse to record lows and buyers to cancel around 175 U.S. cargoes.
But now, front-month gas prices in Europe and Asia were trading at their highest since November 2019 and October 2019, respectively, putting both more than $2 per mmBtu over the U.S. Henry Hub benchmark.
Daily Forecast
Look for higher prices over the short-run as long as weather and LNG demand continue to increase. This is going to be needed to ward off the toppling of storage inventories by the end of October.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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