U.S. natural gas gained 1% because of forecasted cold snap at the end of January

On Wednesday, U.S. natural gas futures rose by about 1% due to updated weather forecasts. It is now projecting lower temperatures in late January, and it’s expected to be colder than now.

Nevertheless, natural gas remains in technically oversold territory, as a relative strength index (RSI) doesn’t exceed 30 for two successive days. This situation persists even despite the mentioned slight growth.

Certain market participants are already doubting that cold weather may cause a price surge any time this winter. Due to this, the premium on March futures over April hit a record low level of 5 cents.

The main factor of uncertainty for the market is still the restarting of the Freeport LNG plant in Texas. After the event being postponed several times, it’s now suggested that the plant will resume work in the second half of January after regulatory approval is granted. At the same time, some analysts think that Freeport will be returned to operation in the first or even the second quarter of the year. They note that additional works are required for getting permission from federal regulators to restart the plant. There’s an increasing number of analysts who believe that Freeport will be restarted no earlier than in February, or even later.