NEW YORK: US natural gas futures soared about 7% on Tuesday from an 18-month low in the prior session as gas started to flow to the long-shut Freeport LNG export plant in Texas and on forecasts for colder weather and more heating demand over the next two weeks than previously expected.
Freeport started receiving gas from pipelines over the long US Martin Luther King Jr holiday weekend, according to data from Refinitiv, a possible sign the plant is finally moving closer to exiting an outage.
Front-month gas futures for February delivery were up 24.4 cents, or 7.1%, to $3.663 per million British thermal units (mmBtu) at 9:59 a.m. EST (1459 GMT). On Friday the contract settled at its lowest price since June 24, 2021.
Tuesday’s gain would be the biggest daily percentage increase since the middle of December. It also pushed the contract out of technically oversold territory for the first time in five days.
Last week, gas speculators boosted their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges for a fourth week in a row to the most since March 2020, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.
Traders said the biggest market uncertainty remains when Freeport LNG’s export plant in Texas will return to service after shutting due to a fire on June 8, 2022.
Gas started flowing to the Freeport plant on Jan. 14 and was on track to reach 69 million cubic feet per day (mmcfd) on Tuesday, according to data from Refinitiv.
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