PROBLEMS CONTINUE AT THE FREEPORT LNG FACILITY
Persistent problems at the Freeport LNG facility have indeed impacted prices. However, there is a silver lining. Despite a freeze in January and subsequent mechanical issues, two of the three LNG trains are set to come back online. The third train is currently experiencing problems, resulting in Freeport taking in only 5% of natural gas capacity via pipeline for export. This reassurance about the facility’s recovery should instill a sense of stability and confidence in our stakeholders.
While Freeport grapples with persistent issues, the imminent ramp-up of the Plaquemines LNG facility brings a ray of hope. The addition of Plaquemines to the market, coupled with the expected resolution of Freeport’s problems, is projected to boost LNG exports by 5% and potentially drive pricing higher, a prospect that should inspire confidence in our stakeholders.
NATURAL GAS PRODUCTION
Production dipped below 100 Bcf/d last week and should continue dropping as producers pull back from drilling until pricing moves upwards. With pricing hovering around $2.00, natural gas producers will continue to scale back production, mainly as we get associated natural production from increased oil drilling.
The weather forecast for the next two weeks indicates a consistent cooling trend in the East and a warming trend in the Northwest. This seasonal shift typically leads to reduced air-conditioning usage and the cessation of any remaining heating demand. This insightful information could positively influence our storage report this coming week, as demand is expected to be lower than usual, keeping stakeholders well-informed and aware.
WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK
Most of the US will experience pleasant temperatures to start the week, with highs ranging from the 60s to 80s. However, some areas will experience locally hotter temperatures in the 90s over the southern US, while the Northwest and Rockies will see locally cooler temperatures in the 40s and 50s due to weather systems bringing showers.
From Tuesday to Thursday, strong high pressure will build over Texas and the South, leading to highs in the 90s and locally reaching 100s. However, cooling is expected from Friday to Sunday as weather systems bring showers to much of the US.
Overall, national natural gas demand is expected to be:
– Light to moderate from Tuesday to Thursday as Texas heats up into the 90s.
– Light to very light from Friday to Sunday as Texas and the South experience cooler temperatures.
ANNOTATED PROMPT MONTH PRICING WITH NOTABLE EVENTS
PJM AD HUB FORWARD POWER PRICES
EIA: NATURAL GAS STORAGE REPORT
