Natural gas prices dropped by 1.75%, closing at ₹336.7, as traders engaged in profit booking following improved supply flows. Enhanced deliveries to the Freeport LNG export plant in Texas have also contributed to market stabilization. Meanwhile, colder weather forecasts and increased heating demand through January 25 lend underlying support, with below-average temperatures anticipated across much of the U.S.
Strong LNG Exports and Production Dynamics
Despite the recent price dip, LNG exports remain robust, with feedgas flows reaching a record 15.5 billion cubic feet per day (bcf/day). U.S. natural gas production averaged 102.6 bcf/day in January, slightly lower than December’s 103.8 bcf/day. Storage levels recorded a withdrawal of 40 bcf, bringing total inventories to 3,373 bcf, reflecting steady demand amidst colder weather.
Long-Term Growth Prospects: Trump’s LNG Vision
Former President Donald Trump’s plan to significantly expand U.S. LNG exports could inject $1.3 trillion into the economy. The oil and gas industry is on track to double its LNG export capacity over the next five years, driven by new facilities and pipelines along the Gulf of Mexico. However, this ambitious growth faces hurdles from regulatory challenges and environmental lawsuits.
Trump’s strategy involves rolling back regulations to further stimulate the world’s largest LNG sector. Despite achieving record exports in 2023, the industry faces uncertainties under President Biden’s administration, which seeks to balance growth with climate commitments. Plans to lift restrictions on new export terminal licenses carry risks, including higher domestic fuel prices and potential impacts on climate goals.
Economic Implications of LNG Expansion
According to S&P Global, doubling U.S. LNG export capacity could generate over $2.5 trillion in revenues and $166 billion in tax income. However, delays or cancellations of new projects could jeopardize approximately 100,000 jobs and $250 billion in GDP contributions, especially as other nations accelerate their LNG initiatives.
Technical Outlook – Natural Gas
The natural gas market experienced long liquidation, with open interest falling by 14.97% to 12,252 contracts. Technically, prices find support zone around 321—295 and face resistance at 377.5; surpassing this level could drive prices toward 400.
As global demand for LNG grows, the interplay between strong export activity, domestic supply fluctuations, and regulatory factors will continue to shape the natural gas market.
Until then, Happy Trading!
Commodity Samachar Securities
We Decode the Language of the Markets
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