Natural gas in the US is getting much cheaper, despite the confluence of several positive factors, which are:
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change of the weather forecast for the end of January and the beginning of February (temperatures are supposed to drop below average)
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Freeport resumes operations. Before the shutdown, this terminal accounted for up to 20% of all LNG exports
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Freeport intends to increase its export capacity from February
On the other hand, we also have some negative information:
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temperatures are still considerably high and US gas inventories could drop by 50-100 billion cubic feet this week
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US authorities delay issuing permits to increase LNG export capacity. The permitting process can take up to several months
From a technical point of view, the price broke below recent local lows and reached its lowest level since June 2021. Currently price is testing the support associated with the local peaks of the previous upward wave (peaks from 2020 and February 2021). Seasonality indicates that the local low should not be reached until January 20-21. In addition, price broke below the neckline of the broad head and shoulders pattern and the range of this formation indicates a significant drop below USD 3 per MMBTU. Nevertheless, a significant weather change could boost price in January or February. In this case upward move could move towards the resistance zone around 4-5 USD/MMBTU.
Seasonality indicates that sell-off may deepen further, although the price bottom should not be far away. Source: xStation5
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