Storage inventories remain near the five year low. Strong international LNG demand and forecasts of above normal temperatures for the latter part of September are unlikely to provide much price relief.
Fundamentals remain bullish, with modest storage deficits, nominal monthly production growth, and medium-term LNG growth on track.
A decrease in demand from cooler temperatures and the temporary closure of the Freeport LNG export terminal has reduced prices, but lagging supply and a warm July may keep them from falling further.
Double-digit summertime pricing has materialized. Risk can be mitigated with a diversified buying strategy. Many facilities are avoiding supplier premiums by relying on index-heavy strategies.
Low gas inventories, continued wartime uncertainty, and general commodities bullishness are causing upward pricing momentum. There appears to be no limit to how high prices could rise.
Long-term deals are more cost effective than short-term ones. Risk can be mitigated with a diversified buying strategy. Many facilities are avoiding supplier premiums by relying on index-heavy strategies.
Strong LNG demand, cooler weather, and geopolitical headlines have been bullish near-term drivers. Natural gas prices remain volatile with energy prices climbing due to the Ukrainian crisis.
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If bearish weather holds and production rebounds as expected, pricing may decline as weather fades, supply gains, and a robust storage exit allows the market to look beyond the end of winter.
Bearish fundamentals have dominated winter thus far, dropping national prices to summer levels. Still, CA prices remain elevated, and changing weather patterns could provide support as heating begins to ramp up.