U.S. Natural Gas price will soon be over $3.00
Posted: Wed Oct 02, 2024 3:07 pm
The natural gas price you see quoted below is the front month NYMEX contract (NOV24) for natural gas to be delivered to Henry Hub, Louisiana in November. If you take a look at the NYMEX strip, the current prices for the next two months are $3.32 for DEC24 and $3.57 for JAN 25.
Trading Economic:
US natural gas futures remained mostly flat around $2.91 per MMBtu on Wednesday afternoon, the highest level since late July, as reduced output and expectations for higher demand this week balanced out forecasts of lower demand next week.
> Prices have risen about 44% over the past five weeks, largely due to significant reductions in fuel storage for the 2024-2025 winter heating season, with July, August, and likely September recording historic low storage builds, according to federal data.
> This decline stemmed from decreased drilling activity after U.S. Henry Hub prices hit a 32-year low in March. < More accurately it is less well completions. Some companies that I follow are drilling and casing horizontal gas wells, but not completing them to sales because they don't want the big volumes that come soon after gas wells are completed to go into a low gas price market.
> Despite lower storage injections in 19 of the past 20 weeks, overall gas inventories are still about 6% above normal for this time of year due to reduced heating demand from the mild winter of 2023-2024. < The surplus to the 5-year average in storage will be zero by early December and likely go to a deficit to the 5-year average by year-end.
> Recent prices are capped by lower demand from power generators, as over 1.3 million homes and businesses in the U.S. Southeast and Midwest remain without power after Hurricane Helene.
A significant fact not mentioned above is that the large LNG export facility build by Venture Global at Plaquemines, Louisiana (over 2 Bcf per day) did begin taking gas late in September and that the Cheniere's Train 3 at Corpus Christi is schedule to ramp up in December. In Q1 2025 demand from all of the U.S. LNG export facilities will be more than 4 Bcf per day higher than it was in Q1 2024.
Trading Economic:
US natural gas futures remained mostly flat around $2.91 per MMBtu on Wednesday afternoon, the highest level since late July, as reduced output and expectations for higher demand this week balanced out forecasts of lower demand next week.
> Prices have risen about 44% over the past five weeks, largely due to significant reductions in fuel storage for the 2024-2025 winter heating season, with July, August, and likely September recording historic low storage builds, according to federal data.
> This decline stemmed from decreased drilling activity after U.S. Henry Hub prices hit a 32-year low in March. < More accurately it is less well completions. Some companies that I follow are drilling and casing horizontal gas wells, but not completing them to sales because they don't want the big volumes that come soon after gas wells are completed to go into a low gas price market.
> Despite lower storage injections in 19 of the past 20 weeks, overall gas inventories are still about 6% above normal for this time of year due to reduced heating demand from the mild winter of 2023-2024. < The surplus to the 5-year average in storage will be zero by early December and likely go to a deficit to the 5-year average by year-end.
> Recent prices are capped by lower demand from power generators, as over 1.3 million homes and businesses in the U.S. Southeast and Midwest remain without power after Hurricane Helene.
A significant fact not mentioned above is that the large LNG export facility build by Venture Global at Plaquemines, Louisiana (over 2 Bcf per day) did begin taking gas late in September and that the Cheniere's Train 3 at Corpus Christi is schedule to ramp up in December. In Q1 2025 demand from all of the U.S. LNG export facilities will be more than 4 Bcf per day higher than it was in Q1 2024.