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U.S. natural gas futures rose Wednesday, reversing earlier losses as colder weather forecasts appeared to outweigh expectations that the restart of the Freeport LNG export plant will be delayed, causing some liquefied natural gas vessels to turn away from the plant in recent days.
Front-month Nymex natural gas (NG1:COM) for December delivery settled +2.7% at $6.20/MMBtu, the contract’s fourth gain in the past five sessions.
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The U.S. Pipeline and Hazardous Materials Safety Administration released the findings of a third-party consultant’s report that blamed the June explosion that shut Freeport LNG on inadequate operating and testing procedures, such as deficiencies in valve testing procedures, failure to adjust alarms that could warn operators of rising temperatures, as well as human error and fatigue.
The PHMSA report did not indicate when the plant, which had accounted for ~15% of U.S. LNG exports prior to the explosion, would resume operations.
Freeport LNG previously maintained the plant remained on track to return to service in November, but the company has not mentioned a restart date in recent days, and Bloomberg reported this week that Freeport told buyers it expected the outage would extend through December.
Gas prices have been supported in part by concerns over a possible U.S. railroad strike, which would threaten coal deliveries to utilities, forcing generators to burn more gas; seven unions have approved labor agreements while three unions have rejected the deal.
