EIA Says Marcellus Prices Often Swing $1 Mcf Below Henry Hub

An article published by the U.S. Energy Information Administration (EIA) on their online Today in Energy publication from yesterday highlights the ongoing struggle for prices in the Marcellus Shale region to keep pace with the benchmark Henry Hub in southern Louisiana. As MDN pointed out just a few weeks ago, it’s not inconceivable that a delivery point in the Marcellus will one day replace the venerated Henry Hub as the new benchmark price (see Will ‘Dominion South’ Replace ‘Henry Hub’ for Natgas Pricing?). The EIA story points out an obvious truth that bears repeating: When you have more production than you have in pipeline capacity to get that production to markets that want it–you get a surplus of supply and much lower prices. Sometimes those prices can, on a dime, swing to a dollar or more lower than the Henry Hub price…

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