Apr 17, 2024

Natural Gas Futures Drop Nearly 5% as Demand Remains Sluggish

Thomas Saal, Senior Vice President of Trading, LTA Energy at StoneX Financial recently shared his views in a Reuters article on the recent steep decline in U.S. natural gas futures. On Monday, April 15th, U.S. natural gas futures dropped nearly 5%, marking a two-week low due to a drop in feedgas to the Freeport LNG export plant in Texas. Demand has been weak for U.S. natural gas futures due to large inventories and a bearish weather outlook.

"As long as it's (Freeport LNG) offline, the market is going to stay little sluggish... there's not enough weather demand too, to overcompensate for that loss of demand on the LNG export," said Thomas Saal, senior vice president for energy at StoneX Financial.
Since the end of January, Freeport LNG has been operating at reduced capacity. In late March, Freeport LNG anticipated for two of their three liquefaction trains to stay shut until May for repairs. Their Train 3 liquefaction unit also experienced a trip on April 10. The amount of gas flowing to Freeport has trickled down to a minimum, with an average of 0.4 bcfd over the past seven days.

The U.S. Energy Information Administration (EIA) reported on April 11th that utilities injected 24 billion cubic feet (bcf) of gas to the storage during the week ended April 5th.

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