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First Look - Natural gas prices slump in early trading as Freeport LNG outage drags on

Oil is trading slightly higher, reversing some losses from Friday
- Speculators increased their net-long position in ICE Brent futures for the fifth consecutive week, according to data released by ICE
- Implied volatility has been falling, with Brent volatility at the lowest level since 2015 and WTI at the lowest level since 2018
- Prompt time-spreads weakened slightly but remain near a multi-month high, potentially indicating strong near-term crude demand
Chinese refining volumes drop amid maintenance (BBG)
- China’s average daily oil processing rate slowed in June for a third consecutive month as more refineries went down for maintenance
- China processed 14.25 MMBbl/d last month, a 4.3% drop from year-ago levels and the lowest monthly average since December
- However, state-operated refiners are expected to increase throughput in July

Natural gas prices slump in early trading as Freeport LNG outage drags on
- Prompt gas was 10.8c lower to $2.221/MMBtu (As of 7:54 AM)
- The Summer ’24 strip is down 8.6c to $2.267 and Winter ‘24/’25 strip is down 6.7c to $3.215
- The European Ensemble shifted colder from Friday’s 00z run, decreasing Lower 48 temperatures by -4.5 F, with significant drops of -22.3 F in the Midwest and -19.7 F in the South Central, indicating cooler temperatures through late July before returning to a rangebound pattern
Freeport LNG cancels at least four cargoes with no restart yet (Bloomberg)
- Freeport LNG canceled at least four shipments due to Hurricane Beryl, which disrupted electricity supply across Texas, including Houston
- Production was curbed before Beryl's landfall, and electricity restoration efforts are ongoing, despite CenterPoint Energy energizing distribution lines near Freeport LNG
- Traders closely monitor the 15 MTPA facility's restart, which potentially impacts US and European gas prices; further cancellations are likely if operations don't resume soon
- As of Monday, natural gas flows to Freeport LNG remain near zero, with three LNG vessels waiting outside the facility and a dredge vessel positioned near the loading jetty