U.S. natural gas futures fell more than 6% on Tuesday as a slightly cooler shift to near term weather forecasts added to headwinds from a prolonged shutdown of Freeport LNG export plant.
Front-month gas futures for August delivery on the New York Mercantile Exchange (NYMEX) fell 11.7 cents, or 2%, to $5.613 per mmBtu at 10:03 a.m. EDT (1403 GMT), after falling over 6% earlier in the session.
“The biggest component of the change in prices today has been the weather revision. We just came off the July 4th holiday, which means we had 3 days in a row with no natural gas futures trading. During those days, near-term weather forecasts have been revised significantly cooler, meaning gas-for-power demand will be less, relative to the expectations of last week,” said John Abeln, an analyst with data provider Refinitiv.
Freeport’s gas export facility hit by fire earlier this month will not be allowed to repair or restart operations until it addresses risks to public safety, a pipeline regulator said on Thursday.
Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8, so the expected 90-day outage would leave around 180 bcf of gas available to the U.S. market.
Russia’s Gazprom could propose expanding its roubles-for-gas scheme for pipeline gas to include LNG, the Interfax news agency quoted a senior manager as saying on Monday. Meanwhile, Kremlin said that no decision had been made on whether to switch sales of Russian LNG to roubles.