Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Natural gas forecast: LNG terminal outage pressures US prices, bolsters EU prices

US Henry Hub natural gas prices plummeted on reduced US export capacity; a Texas LNG facility may take months to get back online after an explosion and AUD/USD approaches a critical point of resistance near the May low.

Source: Bloomberg

US Henry Hub natural gas prices plummeted on reduced US export capacity; a Texas LNG facility may take months to get back online after an explosion and AUD/USD approaches a critical point of resistance near the May low.

US natural gas prices plummeted overnight as traders digested news of a damaged liquified natural gas terminal out of Texas. The Quintana Island facility near Houston suffered a catastrophic explosion last week, an event that will significantly reduce US export capacity of LNG. The current-month Henry Hub price fell 16.49% after the terminal’s operator, Freeport LNG, stated that it may take months to complete repairs.

European gas prices surged on the news, highlighting the importance of US energy imports to the 27-member EU bloc. The European Union started importing as much natural gas as it could following Russia’s invasion of Ukraine, which brought sanctions against Moscow and its energy products. The news represents a major obstacle as the EU attempts to build up storage levels before the winter months when cold temperatures increase energy needs.

There also lies ahead an increased risk for further disruptions to US LNG export capacity. The Atlantic hurricane season began June 01. Previously, major hurricanes have impacted, sometimes severely, the ability to export LNG and other energy products. Moreover, the US National Oceanic Atmospheric Administration (NOAA) predicts an “above-normal” 2022 hurricane season, with the potential for 6 to 10 hurricanes, 3 to 6 of those having the potential to become major hurricanes.

A damaging event to an export terminal would likely further hinder export capacity, which would pressure US prices but send European prices higher. The move lower in US prices is especially telling, given that it is occurring during a major US heatwave, an event that typically causes prices to rise. It speaks to the outsized impact that exports play in the US market. The specific Texas LNG facility could process over 2 billion cubic feet per day. That 2 billion cubic feet per day are now contained to the US domestic market for the time being, which should help to keep prices down.

Natural gas technical outlook

Prices fell to trendline support before rising modestly this morning. The 50-day Simple Moving Average was taken out during the overnight move with ease. The Relative Strength Index (RSI) crossed below its midpoint, while MACD is tracking to do the same. A drop below trendline support would open a path for prices to test a level of support dating back to the October 2021 swing high. The 100-day SMA sits below that support level.

Natural gas daily chart

Source: TradingView


This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.