U.S. Natural Gas Futures Settle Mixed on March Expiry - Barron's
U.S. Natural Gas Futures Settle Mixed on March Expiry
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Natural gas futures are mixed with the contract for March, the last month of the heating season, going off the board at $1.615/mmBtu, down 2.7% from yesterday.
The most-active April contract settles up 3.7% at $1.808/mmBtu.
"Natural gas got a boost ahead of the positioning of the merged contract and signs that production is topping out at least in the short term," Phil Flynn of the Price Futures Group says in a report.
While an "excessive fund short position" keeps open the possibility of a rally, unless demand for natural gas picks up "the glut is going to get larger" with the potential for another price crash, he adds.
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.