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U.S. natural gas futures fell Wednesday on forecasts for less demand over the next two weeks than previously expected and plans of an extended outage of two liquefaction trains at Freeport LNG’s export plant in Texas.
Freeport LNG said it anticipates two of the three trains at its plant will remain out of service for testing and repairs through May, on top of maintenance since late January following a deep freeze in Texas that caused problems at one of the trains.
After the maintenance work is completed, Freeport LNG said its production capacity will jump by 10% from 15M metric tons/year to ~16.5M tons/year by June
The company also said Freeport LNG’s Train 4, which has received all needed regulatory approvals, will add another 25% of LNG production capacity when it becomes operational.
Front-month Nymex natural gas (NG1:COM) for April delivery closed -2.6% to $1.699/oz, up nearly 8% from its 52-week low of $1.576/oz hit on February 20 but down nearly a third YTD.
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Data firm LSEG said gas production in the lower 48 states has dropped to an average of 100.3B cf/day so far in March, down from 104.1B cf/day in February and a monthly record high of 105.5B cf/day in December 2023.
Weather forecasts across the lower 48 states point to mostly colder than normal temperatures through March 24 before turning to near normal during March 25-April 4.
Natural gas in underground storage likely edged higher by 1B cf in the week ended March 15 to 2.326T cf, according to a survey by The Wall Street Journal, which would increase the surplus over the five-year average from 629B cf the previous week.
“While another bullish EIA report tomorrow is possible, the overwhelming challenge of digging out from North American gas inventories 900B cf above normal is likely to suppress near-to-medium term upside,” Eli Rubin of EBW Analytics writes.