U.S. Natural Gas Prices Gain over 3% after Hitting 1997 Low

U.S. natural gas prices gained over 3% on Wednesday, recovering from a four-year low earlier in the week as European demand popped and unseasonably warm temperatures in the southern United States boosted cooling demand to make up for lackluster heating demand.
So far this year, natural gas has shed over 30%.
At 12:49 p.m. ET on Wednesday, U.S. Henry Hub natural gas prices were trading up 3.26% at $1.867 per million British thermal units (MMBtu).
On February 20, U.S. Henry Hub daily natural gas prices averaged $1.50 per million British thermal units (MMBtu), which is the lowest price (adjusted for inflation) since 1997, according to Refinitiv Eikon data, as reported by the Energy Information Administration (EIA).
“High natural gas production, low natural gas consumption, and higher natural gas inventories than the previous five-year (2018–22) average contributed to prices declining for much of 2023 and the first two months of 2024,” the EIA said.
While European gas demand is expected to weaken amid mild weather, global demand for liquefied natural gas (LNG) is poised for further gains throughout the year, banking on Chinese and European buyers.
“LNG has continued to grow, with China being back in the market but not yet at the level of 2021,” Reuters cited TotalEnergies’ Senior Vice President Asia Pacific Exploration & Production Thomas Maurisse as saying at an industry conference.
“With Europe … it’s a new and big market, this demand will still continue to grow. At the same time, new capabilities will not be on stream in this very short term, so will continue to put a bit of pressure on prices and volatility,” he added.
Uncommonly warm winter weather and increased U.S. stockpiles, however, bode ill for short-term natural gas prices.
In February, so far, the U.S. has seen an increase in natural gas output over January; however, output levels are still lower than in December, when it hit a record high of 106.3 billion cubic feet per day. For February, the output is averaging 105.5 Bcfd. Also contributing to the recovery of natural gas prices in the middle of this week was an announcement last week by American shale patch producer Chesapeake Energy, which said it would reduce gas output this year by 30%.

About Parvin Faghfouri Azar

Check Also

Kazakhstan Vows to Compensate for Exceeding OPEC+ Quota

Kazakhstan exceeded its oil production quota under the OPEC+ deal by 131,000 barrels per day …

Leave a Reply

Your email address will not be published. Required fields are marked *