The Weekly Natural Gas Market Newsletter

June 13, 2022

Natural Gas News & Notes

For the week ending 6/10, the July NYMEX natural gas futures contract settled 32.7 cents higher at $8.85. The contract gapped up in trade on Monday morning and hit a new 14 year high of $9.66 by Wednesday morning. However, news of a fire at the Freeport LNG facility quickly spread in the market and the contract immediately reversed trend. The contract plummeted to a low of $8.016 by Thursday morning. The contract met stiff price support at the 40-day moving average and proceeded to bounce higher before ultimately settling at $8.85 on the week.

Natural gas storage rose 97 BCF on the weekly EIA storage report. Inventories now stand at 1,999 BCF which is 16.6% below year ago levels and 14.5% below the previous 5-year average. Market analysts had expected a withdrawal of around 98 BCF so the weekly report was right in-line with expectations. Early estimates for the week ending 6/19 based on supply and demand data is an injection of 91 BCF.

The big news of the week was the fire at the Freeport LNG facility. The facility was averaging almost 2 BCF/day in demand for LNG exports. The fire has stopped production of LNG at the facility. This could prove to be bearish news as this daily gas supply will be dumped back into the market. The most logical destination for the gas would be into storage which could greatly improve existing storage inventory levels. Storage is in catch-up mode trying to reach an adequate level before the winter 2022/2023 heating season. Early reports indicate at least a 3-week outage for the Freeport facility. Should this outage last longer than anticipated, storage levels could increase by 60 BCF/month. This might help take some of the premium out of winter gas pricing which currently sits at $8.691 for the Nov22-Mar23 time period. The market will be eyeing any news about the Freemont facility in the coming weeks.