U.S. natural gas futures fell by 8% due to forecasts of lower demand

On Wednesday, U.S. natural gas futures fell by about 8%, reaching the lowest level in the past 1.5 years. This decline was caused by forecasts of heating demand reduction by the end of the month.

Analysts also continue to opine that the restart of the Freeport LNG export plant in Texas might occur not earlier than in February. The company itself repeatedly announced that the plant that produces liquefied natural gas (LNG) will return to work in the second half of January. Texas Freeport LNG has been shut down for seven months now. At present, the plant awaits approval of a restart request from federal regulators.

When Freeport LNG resumes its service, gas demand in the U.S. is likely to rise significantly. The prices will go up as well. The production capacity allows the plant to turn more than 2 billion cubic feet of natural gas per day into LNG. These volumes represent about 2% of U.S. daily production.

Refinitiv predicts that gas demand in the U.S., including exports, will rise due to the falling temperatures next week. Demand might jump from 121.4 to 128.7 billion cubic feet per day. This forecast turned out to be lower than the one that Refinitiv stated on Tuesday.