Now We’re Cookin’ with Gas! NYMEX Price Soars, Stays Above $3
Finally! We knew it would happen sooner or later. We committed to stop reporting on the price of natural gas unless and until the NYMEX went over $3/MMBtu and stayed there, which happened last week. The front-month NYMEX natural gas contract was close to $3 last Wednesday, closing at $2.99. On Thursday, the price closed at $3.19. Then last Friday, the price soared to $3.34. Bear in mind that all of this upward price action happened before the weekend terrorist attack by Hamas in Israel. Wars tend to upset many different markets, especially wars in the Middle East (and their effect on energy markets). However, yesterday, the price of NYMEX natgas went up another 4 cents to close at $3.38. So far this morning, the price is up even more. Will the price stay above $3 now? And is the NYMEX affecting the regional spot price in the M-U?
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The U.S. rig count dropped again last week, for the third week in a row. The count shed another four active rigs, now down to 619 — the lowest point since February 2022. The count in the Marcellus/Utica, after falling by one two weeks ago, held steady last week at 38, which is the lowest it has been since the beginning of this year. The national rig count is down 143, or 19%, below this time last year. There’s no indicator the trend will reverse anytime soon.
Marcellus/Utica natural gas producers and marketers are adapting to a new status quo. We live in a world where new pipeline takeaway capacity out of the Northeast is hard (almost impossible) to come by and is more or less capped permanently. That’s the reality. Without pipeline expansions, drillers no longer drill with abandon in hopes that the capacity will eventually get built. Reality has sunk in. Instead, drillers practice restraint by (1) slowing drilling activity, (2) delaying completions, and (3) choking back producing wells to manage their inventory during periods of lower demand and prices.
Last November, MDN told you about a lawsuit filed by a family in Washington County, PA, against Chevron (now EQT) for drilling and fracking done in 2011-2012 near the family’s home (see 
Last November MDN told you about a research paper published by Penn State that says the state should look at repurposing old conventional oil and gas wells for use as geothermal energy sources (see 
MARCELLUS/UTICA REGION: Local couple first EQT leaseholders to contribute to WCCF fund; OTHER U.S. REGIONS: Calif. Gov. Newsom signs law requiring businesses to disclose emissions; NATIONAL: Investment titan BlackRock mutes ESG talk amid backlash; The oil patch is primed for an era of megadeals; Bidenomics at work: ‘green’ hydrogen is a very expensive waste of money; INTERNATIONAL: Chevron shuts down natural gas platform near Gaza Strip; Despite echoes of 1973, this is not your father’s oil crisis.