Warm Temps, High Storage Level Drives NatGas Price Down $0.30

Once again the price of natural gas traded on the Henry Hub in south Louisiana, the NYMEX December futures contract, has tanked. The price fell $0.30 yesterday to close at $2.70/Mcf. There were two primary reasons why: (1) The U.S. Energy Information Administration (EIA) released a storage report last Friday showing storage levels are near record-highs (too much supply), and (2) longer range weather models show temps staying warm (not enough demand).
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Spot Prices for M-U NatGas in Basement – Dominion South $0.30/Mcf

We’ve been tracking the daily price of the NYMEX December futures contract at the South Louisiana Henry Hub on and off for the past few months. Yesterday it closed down again, at $2.86/Mcf (or MMBtu). However, the “spot price” for gas–actual physical gas bought and sold at various trading points along pipelines–has all but crashed and burned in the Marcellus/Utica. It’s bad. Like, historic record low bad.
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NYMEX NatGas Price Breaks $3/Mcf Thanks to LNG Shipments

The price of natural gas trading at the Henry Hub terminal in southern Louisiana, the national benchmark price used for NYMEX futures contracts, has been on a rocket ship ride up over the past two days. Two days ago the price added $0.12 in a single day (see Louisiana LNG Begins Moving Again, Forecast Colder, Gas Price Jumps). Yesterday the price added *another* $0.11, passing the $3/Mcf mark for the first time in over a year.
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Louisiana LNG Begins Moving Again, Forecast Colder, Gas Price Jumps

Yesterday MDN told you of a new threat to LNG shipments from Louisiana with the grounding of a semi-submersible rig, blocking traffic coming from Cheniere Energy’s Sabine Pass LNG export terminal (see More Shipping Channel Troubles for Gulf Coast LNG Exports). That’s in addition to a sunken barge blocking traffic from the nearby Cameron LNG terminal (see Sunken Barge in LA Helps Fuel $0.22 One-Day Drop in NatGas Price). We have some good news on both situations…
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Marcellus/Utica Driller Stock Prices Trend Up with NatGas Price

We spotted a couple of stories, one in Barron’s the other in the Wall Street Journal, about the pickup in the futures price of natural gas over the past week, and how those recent gains have led to impressive gains in the share price for Marcellus/Utica drillers. Yesterday the NYMEX Henry Hub futures price closed up 4.11% to $2.74/Mcf. The rising tide lifts all boats.
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Ugly Gas Prices Coming to M-U – Demand Falls More than Production

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Last week the spot price for natural gas being sold at the Dominion South trading hub in Allegheny County, PA crashed to its lowest point in more than a year, selling for $0.735 per Mcf (thousand cubic feet). According to the experts at RBN Energy, the Marcellus/Utica is heading into a rocky fall season with respect to natural gas prices.
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Why is the Oil & Gas Sector Not Bouncing Back More Quickly?

Have you caught yourself thinking lately (as we have), “When in the world is the price of natural gas (and oil) going to go up again?” And, “Why is more drilling not happening?” Perhaps you answer yourself with the obvious answer: It’s the pandemic, stupid. If you have said/thought that, you are correct. But what is there about the pandemic (which seems to be getting better) that is causing this ongoing slowdown and low prices for oil and gas?
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M-U Drilling Slowdown Driving NatGas Prices Higher This Winter

If you live in New York City, Boston, or anywhere in the states of New Jersey, Massachusetts, Connecticut, Rhode Island, or New Hampshire, brace yourselves to pay much higher prices for your natural gas this winter. That’s according to an analysis by S&P Global Platts. Right now the forward strip prices at key trading hubs in those locations show prices for natural gas in the range of $6.00-$6.63 per thousand cubic feet (Mcf), about twice the price of last winter.
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Price of NatGas Up Huge $0.30 in 1 Day as LNG Exports Pick Up

Yesterday the price of natural gas trading on the NYMEX futures exchange, a price based on the spot price at the Louisana Henry Hub trading point, zoomed up, closing 30 cents higher than the trading day before (up 14%). There does not appear to be a single, specific reason why trading took off like wildfire. Some speculate it rose based on the good news that U.S. LNG exports are once again on the rise. Others say short-term forecasts are now predicting continued hot weather. Whatever the reason, we’ll take it!
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M-U Gas May Have Trouble Getting to Other Markets This Fall

The experts at RBN Energy have been analyzing pipelines and natural gas flows out of the Marcellus/Utica region and warn of a coming problem this fall. Production in the M-U remains high. Storage is quickly filling up. The gas needs to exit the region in order to fetch better prices. According to RBN, “This fall, the situation could be even worse and may force producers to shut-in gas for a second time this year.” Pipeline constraints are coming, and that spells problems.
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Investors Love M-U Companies, Even Though Gas Price is Low

How does one make money in the natural gas market these days when the price of gas is at historic lows? One way is if an investor was fortunate enough to bet the price would go down. Those folks made money. The other way is to…invest in drillers? Yep. Even though low prices hurt drillers, investors still like the looks of what is on the horizon, especially for companies operating in the Marcellus/Utica. Example: The stock price for Range Resources and EQT is up over 30% each this year so far.
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How to Predict Price of NGLs – The Spread Between Oil & NatGas

Here’s a little known factoid that will be useful for anyone wondering what the price of NGLs (natural gas liquids) will bring in a given market at a given time. The U.S. Energy Information Administration (EIA), our favorite government agency, points out NGLs almost always fetch prices that are “range-bound” between the price of oil on the high end, and the price of natural gas on the low end. Natural gasoline (an NGL) tracks closest the high end and the price of crude oil, while ethane is at the bottom of list closest to the price of methane.
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