Hot & Bullish US Pattern Much of Next 15-Days vs Bearish LNG Exports w/Freeport Out of Service
Wednesday, June 15: With Freeport LNG failing to export nearly 2 Bcf per day due to the unexpected outage, much of this will go into US supplies. What was initially inferred to be a 3-5 week outage increased to 90-days off yesterday’s press release, potentially much longer. This increased end of injection season estimates from 3.20-3.35 Tcf to 3.5 Tcf, a considerably less intimidating balance compared to what the nat gas markets were expecting just a week ago. So, while weather patterns remain quite bullish and US production continues to underperform, bears have been given a given a miraculous gift through plummeting LNG exports. There’s two ways to look at how this impacts trade in the near term. Either prices dropped too quickly yesterday and they recover today, or yesterday’s plummet occurred so quickly, there’s still an abundance of bulls trapped that need to exit, and if forced to, this could send prices under $7. Regardless of which path prices take, the rest of the week’s trade is likely to be extremely volatile with daily 50-90¢ swings. So far today, prices are taking the recovery path with prices up 45 cents.