NYMEX Henry Hub Price Crashes with Warm Weather Forecast
The commodity price for natural gas, as expressed by the NYMEX Henry Hub futures contract (for January), fell 10.5% in early trading yesterday before finally closing at $2.43/MMBtu, down 15 cents (6.17%) from the previous day. Why the big drop when prices are already low? Lack of demand due to warm weather. In fact, according to the National Weather Service, the entire continental United States will be warmer than average for the period of Dec. 19-25. Plump storage numbers, coupled with the weather, had natgas traders heading for the exits.
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Williams is a powerhouse pipeline company. Williams operates more than 33,000 miles of pipelines in the U.S. and flows approximately one-third of the natural gas used in our country through those pipelines. Massive! The CEO of Williams, Alan Armstrong, is (or was) in Dubai for the United Nations COP28 climate meeting. He was there to preach the gospel of natural gas as the best way, the near-term way, to lower carbon dioxide emissions across the planet. He has proof to back up his claims. The U.S. is the only major country on earth to lower CO2 emissions since 2005. How? By switching from coal to natural gas for power generation.
An ancient Arabian proverb says, “The enemy of my enemy is my friend.” You know we’re no fans of OPEC+ and the murdering thug dictators who run the countries belonging to OPEC+. But this one time, we have praise for the group. They single-handedly changed the language in a final communique issued by the UN COP28 delegates that was supposed to call for the phase-out of fossil fuels worldwide. Instead, the language was modified to say, “reducing both consumption and production of fossil fuels, in a just, orderly and equitable manner.” It was changed at the insistence of the OPEC+ club. Needless to say, the snowflake leftists at COP28 are weeping and wailing and gnashing their teeth.
Venture Global’s Calcasieu Pass LNG export facility recently received Federal Energy Regulatory Committee (FERC) authorization to place the final three liquefaction blocks (7-9) into service (see 
OTHER U.S. REGIONS: Shale-drilling rights jump to pre-COVID price; NATIONAL: Shell selling partial ownership in two U.S. renewable energy projects.
Hope Gas is a Local Distribution Company (LDC) that provides gas service to approximately 125,000 residential, industrial, and commercial customers in thirty-five West Virginia counties. The company owns and maintains more than 6,900 miles of pipelines that safely deliver West Virginia natural gas to many homes and commercial or industrial sites. In September, Hope Gas asked the WV Public Service Commission (PSC) of West Virginia for permission to build a new 30-mile pipeline in Monongalia County (see 
Amol Wayangankar, principal of Enkon Energy Advisors, spoke at the recent Hart Energy DUG Appalachia event in Pittsburgh. He had some REALLY interesting things to say about pipelines and takeaway capacity and where (and how much) Marcellus/Utica gas flows. One fascinating observation: Over the past 24 months, Appalachia gas production grew 0.3 Bcf/d, while production in the Haynesville Shale grew 2.5 Bcf/d and 5 Bcf/d in the Permian Basin. The M-U is in danger of losing market share to other basins unless we can begin to get more of our production out of the Northeast.
The Baker Hughes U.S. rig count hit a new low for 2023 five weeks ago (see 
In August, University of Pittsburgh (Pitt) researchers released three studies commissioned by the State Dept. of Health supposedly investigating whether or not there is a connection between shale drilling and childhood diseases, including cancer (see 
With all of the posturing and hoopla happening at the 28th United Nations Climate Change (COP28) conference being held in Dubai, which mercifully ends tomorrow, let’s look at the facts. The windbags at COP28 have elected to make natural gas THE DEVIL at this year’s event. Fugitive methane (escaping into the atmosphere) is the big boogeyman that will toast Mom Earth into a cinder, so they say. The solution, according to flatulating windbags like U.S. Special Envoy John Kerry and UN Secretary-General António Guterres, is to outlaw fossil fuels (specifically natural gas). Yet here’s what the facts show: The Marcellus/Utica natural gas industry is already the world leader in lowering methane emission intensity, due to the implementation of best practices for years.
New shale permits issued for Nov 27 – Dec 3 in the Marcellus/Utica were much improved over the previous few weeks. There were 25 new permits issued last week versus 14 issued two weeks ago and just one new permit three weeks ago. So the trend is our friend! Last week’s permit tally included 15 new permits in Pennsylvania, 8 new permits in Ohio, and 2 new permits in West Virginia. Three companies tied for top place with 4 permits each: Seneca Resources in PA, Ascent Resources and Encino Energy in OH.
Hart Energy keeps the hits rolling, publishing interviews and articles from the recent DUG Appalachia event held in Pittsburgh in November. The latest is a transcript of an interview between Hart Energy’s editorial director and Encino Energy’s CTO. According to the CTO, the company uses “machine learning” to perfect its oil drilling in the northern Ohio Utica, and it’s paying off. Encino is looking to expand in the Ohio Utica — looking to lease more and drill more.
One of the speakers at the recent Hart Energy DUG Appalachia event in Pittsburgh was Douglas Kris, senior vice president of Diversified Energy. For years, we have highlighted Diversified’s “contrarian” business model (