Although domestic heating consumption has dropped this week, exports remain strong aside from a brief hiccup that reduced LNG feedgas demand about 2 Bcf/d on Tuesday of this week at Freeport and Corpus Christi LNG.
However, since that time, LNG flows have rebounded to the 11 Bcf/d rate late this week, and Mexican exports have also undergone a recovery to the mid-5 Bcf/d range after slipping lower during the recent holiday period.
This week’s gains will be further challenged after the long weekend as traders look beyond the current period to understand if cold forecasts can be sustained into early February.
The theme for this winter has been one of variability, and weather forecasters have stressed the difficulty this set-up will have in stringing together a prolonged period of significant below-normal temperatures.
If this proves to be the case, the February contract may undergo a quick correction towards support near $2.54/MMBtu.
Source: Gelber & Associates
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