EQT’s Toby Rice Predicts Gas Below $3 for Now; Politicians Butt Out
Toby Rice, CEO of EQT Corporation, currently the largest natural gas producer in the U.S., spoke yesterday at the Gastech event in Houston. Rice expressed his view that the Henry Hub price for natural gas will remain below $3/MMBtu “in the short term.” He also had thoughts on how long companies like his will continue to curtail natgas production. Rice said curtailments will “ease by next year” when more LNG exports begin to pick up. Said another way, Rice expects to continue holding back at least some supply for the balance of this year. Read More “EQT’s Toby Rice Predicts Gas Below $3 for Now; Politicians Butt Out”
In yet another attempt to deflect attention away from Kamala Harris’ extreme position on fracking (she wanted to ban it completely everywhere in 2019), mainstream news continues to publish stories on other Pennsylvania energy topics. For example, yesterday, the New York Times published a story with this headline: “Big Energy Issue in Pennsylvania Is Low Natural Gas Prices. Not Fracking.” We forced ourselves to read it all the way through. We “took one for the team,” so you won’t have to. The story started out fine and made some legitimate points. The NYT article is (more or less) right as far as it goes. The problem is that the article doesn’t go far enough. It stops with only half of the story told. Here at MDN, we tell you the whole story—all of the facts, not just some of the facts. 
Once a month, the U.S. Energy Information Administration (EIA) analysts issue the agency’s 
There’s just no way to sugarcoat the fact that the low low price for natural gas is having an impact on shale drillers in the Marcellus/Utica. According to an analyst with RBN Energy, a price plunge to near the $2/MMBtu level in early 2023 “crippled” financial results for the companies RBN monitors that are gas-focused (namely M-U companies). However, most producers on the RBN list have remained in the black through spending less and cutting back on production. Down but far from out. How did the major M-U companies that are publicly traded perform in 2Q24? We have the numbers below. 
Despite one of the hottest summers on record, natural gas prices are in the crapper. The abysmal price situation is causing big drillers in the Marcellus/Utica, like EQT and Coterra, to cut back even further on natural gas production, according to an article in the Wall Street Journal. Coterra CEO Tom Jorden recently told investors that “gas markets are oversupplied,” and his company will trim production by an extra 325 MMcf/d (see 
Yesterday, the “front month” NYMEX natural gas contract for Sept. delivery gained 4.60 cents per million British thermal units (MMBtu), rising 2.15% to $2.1890/MMBtu. Hey! Above $2 for five consecutive trading sessions! How long will the price stay above $2? Zacks.com took a stab at answering that question.
The “front month” NYMEX natural gas price, based on the Henry Hub in Louisiana, closed below $2/MMBtu on Friday. It was the second day in a row the NYMEX price closed below $2. The cash price was even worse, averaging $1.89 on Friday after bottoming out earlier in the week at $1.80. Geesh. We thought we left that bottom-bumping low-price stuff behind a while ago, but apparently not. What’s going on? Even though temps have been hot hot hot, there are concerns over an uptick in production over the past week. Too much supply with the same demand equals lower prices.
According to the U.S. Energy Information Administration (EIA), the average monthly wholesale spot (not futures, but spot) natural gas price at the U.S. benchmark Henry Hub fell by 20% to $2.56 per million British thermal units (MMBtu) between January and June of this year. In January, the Henry Hub price averaged $3.18/MMBtu, then dropped to $1.49/MMBtu in March, marking the lowest average monthly inflation-adjusted price since at least 1997. In addition, prices from February through April 2024 were the lowest ever recorded for those months.
It pains us to write these kinds of posts, but we can’t ignore the bad news that the futures price for natural gas (NYMEX Henry Hub, front-month) is once again crashing. It closed down just above $2.00 yesterday. Will the price actually sink below $2 once again? It’s possible. The question is, why? What is driving this latest round of low prices even as the weather has been hot, hot, hot? We almost saw prices above $3 not long ago, and yet here we are, bumping along near $2 once again. The NYMEX price has closed down (lower than the previous day) in 19 of the last 24 trading sessions.
Natural gas traders are predicting (more like warning) that Europe’s natural gas storage tanks will be filled to the tippy top during the third quarter (which ends in September), ahead of the normal schedule. At the start of the second quarter, Europe’s tanks were 59% full. As of July 12, they were 80% full. If European storage closes early, that will put downward pressure on prices here in the U.S. Less demand with the same supply equals lower prices.
Must be it’s an election year. How do we know? The desperate Democrats are doing their best to distract and focus attention away from the decrepit, mentally impaired Joe Biden by accusing “Big Oil” of conspiring with OPEC to keep oil prices high. Except oil prices aren’t all that high. U.S. Senator Sheldon Whitehouse, a Communist (who pretends to be a Democrat) from Rhode Island, is “demanding” all sorts of internal communications from “Big Oil” companies in a new witch hunt he’s launched into this earth-shattering matter. Sheldon Whitehouse is a LOSER in all capitals.