U.S. gas prices jumped by 9%, Freeport requests permission for its restart

At the beginning of this week, U.S. gas prices have sharply increased by 9% from their low of 19 months. The rise was majorly driven by two factors. The first one is a request from the U.S. export plant Freeport LNG to restart its operation. The second one is the weather forecast of a more severe cold snap than it was expected.

The restart of Freeport LNG was scheduled for the second half of January. However, many analysts considered this deadline quite skeptically, as it requires a significant amount of repair work.

According to Freeport LNG representatives, the plant is now ready to resume its functioning and is awaiting permission for its restart from U.S. regulators. The plant’s return to service will increase gas demand and is likely to stimulate the rise in prices.

Natural gas futures have left a technical oversold zone for the first time in 4 days, demonstrating the biggest percentage increase since the beginning of November. However, the U.S. Commodity Futures Trading Commission outlined that speculators managed to raise short positions in gas futures and options to the highest level since March 2020. It was possible, as gas prices had fallen by nearly 52% in the past five weeks before the recorded rise.