Our Sweet 16 "Gassers" could lead the pack in Q1 2024

[dan_s]

The weather forecast models are now showing a significant change in the weather pattern for the U.S. You may recall that last winter the last two weeks of December 2022 were much colder than normal and big 200+ Bcf draws from storage per week were reported. Then January 2023 was much warmer than normal east of the Rockies, causing natural gas prices to drop sharply. Draws from U.S. natural gas storage were less than 50% of the 5-year average in January 2023.

This winter the weather pattern is almost the direct opposite. It shows below normal temperatures and snow deep into the Southeast U.S. during the first six weeks of 2024, where more than 90% of homes heat with natural gas.

Watch the Saturday Summary here: https://www.weatherbell.com/premium/

If Joe's forecast is correct, natural gas in U.S. storage should move back to the 5-year average in ~6 weeks.

My 2024 forecasts are now based on average prices of:
> $75 for WTI in Q1 and $80 for the full year. Barring a major global recession, demand for oil will go up by 2 million bpd from end of Q1 to end of Q2.
> $3.00 for HH ngas in Q1 and $3.25 for the full year. This assumes that ngas in storage moves back to the 5-year average by April. < A colder than normal January in the Southeast U.S. will go a long way to making this likely.

If you look at the Sweet 16 summary spreadsheet you will see (under Tab 1) that all 16 companies were profitable in 1H 2023 when WTI averaged $74.89/bbl and HH natural gas averaged $2.52/mcf.

The current January 2024 weather forecast is also bullish for NGL prices.

[farrell90]

Cold weather across US to last several days at least. Perhaps the coldest spell for several years. Snow pack to extend down to upper midwest.

Bloomberg natural gas prices up over 7% today to 3.33

//weather.com/forecast/national/news/2024-01-10-arctic-cold-outbreak-south-plains-midwest

[mitchl]

Chicago 10 day forecast is starting to look more interesting.