Natural Gas recovered on Friday amid expectations of colder weather, but financial company LSEG predicts weak demand in the coming weeks.
US gasoline futures for March delivery jumped 1.41% to $2.08 per metric million British thermal units (MMBtu) on January 02. Furthermore, analysts predict an additional 0.82% climb to $2.10 per MMBtu in the coming market session.
It rebounded from Thursday’s 2.38% drop to a nine-month low of $2.05 per MMBtu but finished the week 23.34% lower. In addition, the energy commodity gained 7.66% last week but lost 23.97% two weeks ago.
Weather forecasters stated that seasonally cold weather will return this month, boosting heating demand. However, they also estimated that warmer-than-normal temperatures will persist until mid-February.
Meanwhile, industry experts see tremendous pressure on natural gas prices as more wells recover from the mid-January freeze. Gas flow in the nation diminished sharply after a cold snap caused outages in Freeport LNG’s Texas export plant.
Additionally, gasoline inventories in the US added 1.16 million barrels in the week ending January 26. It was lower than the market consensus of 1.48 million barrels but pointed to the fourth consecutive week of accumulation.
Lastly, a top US Department of Energy (DoE) official is set to testify to the Senate Energy Committee on February 08. The hearing will decide whether the White House will pause approvals on natural gas exports to support prices.
LSEG Projects a Plunge in Natural Gas Demand
The London Stock Exchange Group (LSEG) anticipates US natural gas demand to soften to 125.10 billion cubic feet per day (bcfd) in the week ending February 09. This would mark a 1.18% decline from 126.60 bcfd the previous week.
In contrast, gasoline output has increased by 2.65% to 104.70 bcfd this month from 102.00 bcfd in January. Nevertheless, that was still 1.51% below the monthly record high of 106.30 bcfd in December 2023.
America became the world’s top gas supplier in 2023, overtaking previous leaders Australia and Qatar. The US enjoyed an increased global market share mainly due to supply disruptions and sanctions associated with the Russo-Ukrainian war.
