Coming off a huge sell-off in the previous session, natural gas futures recovered some of their losses in early trading Friday as the Freeport liquefied natural gas (LNG) terminal outage continued to roil the market ahead of the extended July Fourth holiday weekend.

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After plummeting $1.074 on Thursday, the August Nymex contract was up 45.9 cents to $5.883/MMBtu as of around 8:50 a.m. ET.

The Energy Information Administration (EIA) on Thursday reported an 82 Bcf injection into Lower 48 storage for the week ended June 24. The print marked a second straight EIA report that significantly overshot estimates following the explosion that knocked the Freeport LNG terminal offline. 

“For the second week in a row, it was above the highest published estimate,” Wood Mackenzie analyst Eric Fell said of the latest EIA print. “Compared to degree days and normal seasonality, this week’s injection appears loose/bearish versus the prior five-year average by 1.3 Bcf/d.”

The bearish miss helped send prices tumbling in Thursday’s session, as did reports of an order from the Pipeline and Hazardous Materials Safety Administration that signaled potential delays to Freeport’s return to service.

The requirement for “outside analysis prior to being able to restart” introduces “further uncertainty on the outlook for LNG exports,” analysts at Tudor, Pickering, Holt & Co. (TPH) said. 

It also lowers the likelihood of the Freeport LNG terminal restarting earlier ahead of the upcoming winter, the TPH analysts noted.

“We see a lowered risk premium and probability associated with market balances through the winter driving pricing despite recent supportive weather trends in the Lower 48,” the TPH analysts said. 

From a technical standpoint, ICAP Technical Analysis pointed to the 200-day and 50-week moving averages as key levels to watch to see if prices manage to stabilize following Thursday’s swoon.

“The 200-day moving average currently sits at $5.614,” ICAP analyst Brian LaRose said. “The 50-week moving average currently sits at $5.352. Should natural gas fail to hold above these moving averages, our only choice will be to set our sights even lower. Peg $5.115, $4.847, $4.577 and $4.069 as the next steps to the downside in this case.”