Natural Gas Prices Advance, Stocks Mixed, On Frigid Temps

U.S. natural gas prices swung low, then higher Friday as freezing temperatures descended across the country. Meanwhile, natural gas stocks and LNG stocks were mixed Friday as a key export terminal in Texas announced a delay to its restart date.

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With frigid temperatures, winter weather warnings and around a million people experiencing weather-related power outages Friday, U.S. natural gas prices advanced 3% to around $5.16 per million British thermal units (BTU). Prices had dropped as low as $4.82 per million Btu in early trade, the lowest in nine months, after Energy Information Administration data showed a smaller-than-expected gas storage draw.

Gas prices also jabbed lower after Freeport LNG announced on Friday further delays to the restart date of its Quintana, Texas, export plant. The private company reported it does not anticipate an initial restart of its liquefaction facility, idled by an explosion and fire in June, until the second half of January 2023. Freeport LNG reported last month that it was targeting an “initial production” restart by mid-December.

U.S. natural gas prices have fallen sharply from August highs above $10, despite growing gas exports due to demand for liquefied natural gas (LNG). Milder temperatures in October and November appear to have delayed the heating season, and shut down of the Freeport LNG facility has limited demand for exports.

Despite Friday’s bounce, natural gas futures were down nearly 24% for the week. Friday’s preholiday market trading showed both natural gas stocks and LNG stocks were mixed.

Natural Gas Prices, Natural Gas Stocks And LNG Stocks

Natural gas producers Range Resources (RRC), EQT (EQT) and Coterra Energy (CTRA) all shot up more than 2% Friday.

LNG stock Cheniere Energy (LNG) edged up around 1% amid low volume to 154.10. Cheniere Energy has fallen to test support at its 40-week moving average. Shares are up more than 5o% for the year, but the stock’s relative strength line has lagged since November.

Houston-based Cheniere is the largest producer of liquefied natural gas in the U.S. and one of the largest LNG operators in the world. Its services range from gas procurement and transport to vessel chartering and delivery. Cheniere owns and operates liquefied natural gas terminals near Corpus Christi, Texas.

Freeport LNG And LNG Stocks

News of another restart delay from Freeport LNG comes just days after financial data provider Refinitiv reported showed that the plant had taken a delivery of natural gas.

The restart is most recent delay in a string of timeline changes. Freeport had previously said in August it anticipated partial operations to resume at the export terminal in early November, vs. earlier estimates for October. The private company said in November it was aiming to ramp up to a sustained level of at least 2 billion cubic feet per day — about 15% of total U.S. LNG export capacity — by January 2023.

Bringing 2 billion cubic feet per day online by January 2023 now looks unlikely. U.S. LNG has been shipped to Europe at an increased rate in 2022. When Freeport LNG comes back online, more shipments could potentially flow across the Atlantic.

With U.S. natural gas prices up Friday, shares of LNG and transport and processor Golar LNG (GLNG) increased 12.1%. Competitor Flex LNG (FLNG) edged up 0.9%.

Please follow Kit Norton on Twitter @KitNorton for more coverage.

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