Natural gas prices soared Monday morning as freezing temperatures and heavy precipitation on the West Coast have increased demand for heating fuels in the U.S. Natural gas stocks advanced along with LNG stocks Monday.
U.S. natural gas prices shot up more than 10% Monday morning to around $7 per million British thermal units. The jump in prices comes after natural gas futures dropped to six-month lows last week, trading around $5 per million BTUs.
Prices have been mostly subdued so far this winter, despite growing gas exports due to demand for liquefied natural gas, as milder temperatures in October and November appear to have delayed the heating season.
The advance in gas prices from recent lows comes as much colder weather is forecast across the country. Last week's U.S. natural gas storage inventory also showed levels are down 1.5% compared to last year. Nationally, gas storage is down 1.6% compared to the five-year average, according to the Energy Information Administration (EIA).
However, on the West Coast, Northern California's PG&E shows gas in storage down 18% compared to last year and more than 23% below the five-year average, according to EIA weekly data. With cold weather and storms rolling across the Pacific Coast, PG&E Citygate recorded spot natural gas prices spiking as high as $55 on Friday for 1 million BTUs, with offers up to $60, according to Natural Gas Intelligence.
Natural Gas Stocks And LNG Stocks
Meanwhile, cold weather has also arrived in Europe, starting to dent natural gas inventories which had been near capacity. European Amsterdam natural gas futures traded around $147 per megawatt hour after dropping to six-month lows, around $100, last month.
The European Union had worked hard to shore up natural gas supplies after Russia curtailed its gas deliveries and European Union countries sanctioned Russian coal. The EU had gotten natural gas storage levels up to around 96% full in November. However, a cold snap has now arrived with temperatures below zero Fahrenheit expected in some regions. EU gas stores were around 88% of full capacity on Monday, according to the Gas Infrastructure Europe website.
In the U.S., natural gas stocks along with LNG plays mostly advanced Monday during general market trading.
Natural gas producers Range Resources, EQT and Coterra Energy all shot up Monday. Range Resources spiked 5.4% while EQT shares added 4.1% trading around 37.15. EQT shares are broken down below key levels of support, after rising 138% for the year through mid-September.
LNG stock Cheniere Energy shot up 2% to 162.21 and New Fortress Energy edged up 2.4%. Cheniere Energy has fallen below support at its 10-week moving average. Shares are up 60% for the year.
Houston-based Cheniere is the largest producer of liquefied natural gas in the U.S. and one of the largest LNG operators in the world. Its services range from gas procurement and transport to vessel chartering and delivery. Cheniere owns and operates liquefied natural gas terminals near Corpus Christi, Texas.
Freeport LNG And LNG Stocks Golar, Flex
Meanwhile, a major U.S. Gulf Coast export terminal is expected to come back online soon. Freeport LNG's Quintana, Texas, export plant has been offline since a June 8 fire. The privately held company reported last month that it is targeting an "initial production" restart by mid-December.
Freeport had previously said in August it anticipated partial operations to resume at the export terminal in early November, vs. earlier estimates for October. The facility aims to ramp up to a sustained level of at least 2 billion cubic feet per day — about 15% of total U.S. LNG export capacity — by Jan. 2023.
U.S. LNG has been shipped to Europe at an increased rate in 2022. With Freeport LNG back online, more shipments could potentially flow across the Atlantic.
Last week, President Joe Biden and British Prime Minister Rishi Sunak announced an "energy security and affordability partnership." The deal calls for a doubling of the amount of liquefied natural gas the U.S. exports to the U.K. this year, compared with 2021.
Along with natural gas prices, on Monday shares of LNG and transport and processor Golar LNG increased 1.8%, while competitor Flex LNG surged 4%. FLNG shares are in consolidation nearing a 37.09 buy point.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
