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.
Read More “Can Natural Gas Futures Continue to Stay Above $2/MMBtu?”
Once a month, the U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. Starting in June, the EIA axed its monthly Drilling Productivity Report that focused on shale plays and instead rolled it into the monthly STEO (see Biden EIA Dumps Detailed Monthly U.S. Shale Drilling Report). We’re still grumbling about the change. So, what did the August 2024 STEO, issued on Tuesday, show?
Read More “August STEO Predicts Avg Henry Hub Price Over $3 This Winter”
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.
Read More “NYMEX Natural Gas Price Closes Below $2 Once Again”
We often write about the price of natural gas because it is the price that drives everything else. But there is no one “price” for natural gas. Natural gas is sold along pipelines at many different locations. However, the NYMEX Henry Hub “front month” futures price is often used as a proxy for “the price” of natural gas. But what is a futures vs. spot price? And, what is the natural gas futures market? The U.S. Energy Information Administration (EIA) helps us answer those questions in a recent post.
Read More “NYMEX 101: What is The Natural Gas Futures Market?”
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.
Read More “U.S. NatGas Spot Price Fell to Record Historic Low During 1H24”
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.
Read More “NYMEX NatGas Price Crashes Again – Closes at $2.04/MMBtu”
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.
Read More “Europe NatGas Storage Full in Third Quarter – Prices Trend Down”
Yes, we’ve been keeping an eye on the (pathetic) price of natural gas as it flounders and flops. The NYMEX Henry Hub front-month contract briefly went above $3/MMBtu earlier this year, but since that time, it’s had a hard time staying above $2. It’s depressing. From time to time, we bring you predictions from various studies and government agencies. Just yesterday, we told you that EIA’s monthly Short-Term Energy Outlook predicts an average HH price of $2.50 in 2024, and $3.30 in 2025 (see July STEO Predicts U.S. Natgas Output Declines, Demand Rises 2024). The people who create the price — natural gas traders — often provide unique insights. We have one such trader’s insights into what he believes will happen for the balance of 2024 and into 2025.
Read More “Gas Trader Predicts NatGas $2.50 in 2024, $3.00+ in 2025 & Beyond”
Once a month, the U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. Starting last month, the EIA axed its monthly Drilling Productivity Report that focused on shale plays and instead rolled it into the monthly STEO (see Biden EIA Dumps Detailed Monthly U.S. Shale Drilling Report). We’re still grumbling about the change. So, what did yesterday’s July 2024 STEO show? On a macro level, the EIA predicts U.S. natural gas production will decline in 2024 while demand will rise to a record high.
Read More “July STEO Predicts U.S. Natgas Output Declines, Demand Rises 2024”
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.
Read More “U.S. Sen. Sheldon Whitehouse Witch Hunt Against O&G Re OPEC”
Last Friday, Morningstar DBRS published a commentary titled, “Record-High Temperatures Boost Power Demand but Ample Gas Inventories Prevent a Bigger Jump in Prices” (full copy below). Since early March, U.S. and European natural gas prices have climbed steadily in the anticipation — and eventual onset — of much warmer than normal early summer temperatures even as producers curbed supply to contend with the glut built up during the past mild winter. Although U.S. and European gas storage inventories have been drawn down from early 2024, they remain high for this time of year. Large inventories are preventing prices from moving higher, says Morningstar analysts. It’s classic economics — more supply with the same demand equals lower prices.
Read More “Even with High Temps, NatGas Prices Remain Low Due to Inventory”
Ethane is an interesting NGL (natural gas liquid). It’s one of the compounds that comes out of the ground as a gas along with methane. Ethane gas can be liquefied under pressure or at reduced temperatures and separated from methane (natural gas). However, liquefied ethane is not burned, like another NGL called propane. Instead, liquefied ethane is used as a feedstock in big cracker plants like the Shell cracker in Monaca, PA. The ethane is “cracked” and turned into plastics. However, if the price ethane fetches is lower than the cost of methane, the ethane gas is left in the methane gas stream and burned along with methane (called “rejection”). The analysts at RBN Energy have noticed that the price of ethane is now below the price of natgas and theorize more ethane rejection (leaving it in the methane stream) may be on the way.
Read More “Price for Ethane Dips Below NatGas for First Time in 2024”
Once a month, the U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. We sometimes poke good-natured fun at the EIA because their predictions go up in one month, and in the next month, they go down, etc. What about the latest STEO dart board, published yesterday? EIA predicts the average spot price for natural gas will be $2.50/MMBtu in 2024, up $0.30 from its prediction just last month (see May STEO Predicts NatGas Production to Fall Slightly in 2Q). The agency also raised the average spot price prediction for gas in 2025. Last month, it was $3.10; this month, it was $3.20.
Read More “June STEO Predicts Marcellus/Utica Production to Fall 4% in 2024”
The price of natural gas traded at the Henry Hub (HH) in Southern Louisiana is THE benchmark price used for the entire industry in the U.S. All other prices are compared to the HH. The HH serves as the official delivery location for futures contracts on the New York Mercantile Exchange (NYMEX). The hub is owned by Sabine Pipe Line LLC and has access to many of the major gas markets in the United States, hence its use as the benchmark. A major trading hub in the Marcellus/Utica, Columbia Gas, tended to follow the HH, rising when HH went up and falling when HH lost value. It’s never a one-to-one correlation, but it’s close. That is, until the past year, when, according to analysts with Argus Media, the Columbia Gas trading hub became “untethered” from the HH.
Read More “Columbia Gas M-U Trading Hub Now Untethered from NYMEX”
Price volatility is how much and how fast a price, like the NYMEX futures price of natural gas at the Henry Hub, changes. How much the price “swings” up or down, and how suddenly, is a measure of volatility. In 2022, when the price of natgas spiked to new multi-year highs, it did so quickly. The price in 2022 also came down about as quickly as it rose, meaning extreme volatility. Since early 2022, NYMEX prices, in general, along with volatility, have settled down. The extreme price swings are gone — at least for now. Sadly, higher prices for natgas are also gone for now.
Read More “U.S. NatGas Price Volatility Calmed Down After a Wild Ride in 2022”
According to Bloomberg News, commodities traders are “bracing for a record-smashing summer that will shake up commodities.” Bloomberg falsely states that people around the world “are already living through the havoc brought on by global temperatures that are breaking records.” Bloomberg ominously warns, “It’s about to get a lot worse.” Nothing sells like bad news, even if the bad news is blatantly false. In a hilarious statement in the same article, Bloomberg attributes high inflation under Joementia to global warming. Talk about sleazy and sick. Based on assumptions that Mom Earth will toast this summer, Bloomberg predicts natgas prices will jump by 50% this summer, to $4/MMBtu, because of all the extra electricity required for air conditioning.
Read More “Bloomberg Predicts Henry Hub Price May Spike to $4 with Summer Heat”