Traders Bracing for Major Announcement Regarding Freeport LNG
Natural gas futures are trading flat and inside Friday’s trading range as traders anxiously await news regarding the possible restart of the Freeport LNG plant in December.
According to a report released on Friday, Freeport LNG said it was targeting a mid-December restart for its export plant, which has been shut for six months after a fire.
The news is potentially bullish for natural gas prices because it could increase demand by at least 2.1 billion cubic feet per day (bcfd).
At 12:55 GMT, January natural gas futures are trading $6.714, down $0.002 or -0.03%. On Friday, the United States Natural Gas Fund ETF (LNG) settled at $20.55, down $0.05 or -0.24%.
Demand Could Return Quickly
In recent days, a couple of LNG vessels that were either heading for Freeport (LNG Rosenrot) or had waited outside the plant (Prism Brillance) have moved to other ports.
LNG Rosenrot is now headed for Gibraltar, while Prism Brillance is sitting outside Corpus Christi in Texas where Cheniere Energy Inc has an LNG export plant, ship trading data from Refinitiv showed.
In other LNG news, the Cadiz Knutsen was on track to arrive at the Everett LNG terminal in Boston over the next day or two with cargo from Trinidad, making it the first LNG vessel to go to the port since August, according to Refinitiv data.
Short-Term Weather Forecast
According to NatGasWeather for November 18-24, “Colder than normal temperatures will rule most of the U.S. with rain, snow and frosty highs of 0s to 40s. Across the northern U.S., where could see lows of -10s to 20s.
The southern U.S. will be cool to mild with highs of 40s to 60s, lows of 20s and 30s besides warmer 70s in the Southwest deserts and Florida.
Temperatures will warm over much of the U.S. during the second half of this week with highs of 50s to 70s besides the cooler Great Lakes and Northeast with 30s to 50s.
Overall, high to very high national demand for the next 5-days then easing.
The price consolidation suggests traders are getting prepared for the big news. If Freeport LNG announces a December date for its restart then look for prices to surge to the upside. If Freeport LNG once again delays the restart or pushes it into January, prices could weaken.
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