As NatGas Production Stays High & Wx Moderate, Henry Hub Drops 8%

Although last week saw a nice increase in the futures price for natural gas (the NYMEX front month contract for June, for gas traded at the Henry Hub in Louisiana), the price decreased once again yesterday, dropping 7.7% (-$0.18) to $2.40/MMBtu, which erased more than half of the gains from last week. Why? Primarily because production remains at or near all-time highs of 100 billion cubic feet per day (Bcf/d), and the weather is mild right now--no extreme heat to cause folks to turn on the air conditioner (causing the need for more gas-fired electricity). So here we sit, with the price of natgas still bumping around under $2.50/MMBtu. Bummer.

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