US Natgas Extends Correction Lower Following Friday Price Spike

US Natgas extends the correction down driven by a slightly warmer weather forecast and lower LNG demand expectations due to warmer weather in Europe and modest China growth targets. The reverse back down follows a price spike higher late on Friday.

• US Natgas APR 23 down -10.9% at 2.68$/mmbtu
• Uncertainty remains over China demand this year after the announcement over the weekend of more modest growth targets for 2023 and a greater role of coal for power generation. Low winter demand has allowed for high gas storage levels in Europe and Asia to ease pressure on global LNG supplies. Strong US LNG exports are still likely to be required over the summer to help restock European supplies ahead of next winter.
• Prices have been supported over the last couple of weeks by a gradual increase in supply and return to operation of the Freeport LNG terminal.
• Total deliveries to US LNG export terminals are today estimated at 13.6bcf/d having reached a recent peak of 14.15bf/d on Saturday according to Bloomberg. Feedgas deliveries to Freeport LNG are today estimated up to 1.72bcf/d compared to around 2.1bcf/d before the outage.
• The current forecast shows slightly below normal temperatures across the US throughout most of the current two week forecast. Current demand is near normal at 79.9bcf/d.
• US production was at 100.1bcf/d yesterday and export flows to Mexico are around 5.4bcf/d.