U.S. natural gas futures fell by 4% on Wednesday, thereby hitting a two-week low. Front-month gas futures fell 4.1% to $5.785 per million British thermal units—the lowest figure since November 1.
This comes after forecasts for less cold weather and lower-than-expected heating demand next week were released.
Aside from the aforementioned forecasts, prices were also driven down by reports that Freeport LNG will delay the restart of its liquefied natural gas (LNG) export plant in Texas until December or later. As a result of this update, several LNG vessels were turned away from Freeport.
One heavily redacted consultant’s report blamed the delay on a combination of inadequate operating and testing procedures, human fatigue, and the aftereffects of the explosion on June 8 that resulted in a temporary shutdown of the plant.
Prior to the latest announcement of the delay in reopening, Freeport had claimed that it would be ready to reopen sometime in November. As a result of the extended delay, there is significantly less gas for European imports than expected.
Once the Freeport plant restarts, U.S. gas prices are expected to rise due to increased demand from the country’s LNG export plants.