• Sign up for the Daily Digest E-mail
  • Facebook
  • Twitter
  • LinkedIn

BOE Report

Sign up
  • Home
  • Headlines
    • Latest Headlines
    • Columns
    • Discussions
  • Well Activity Map
  • Property Listings
  • Land Sales
  • M&A Activity
    • M&A Database
    • AER Transfers
  • Markets
  • Rig Counts
    • CAODC Rig Count
    • Baker Hughes Rig Count
    • USA Rig Count
  • Industry Data
    • Canada Well Licences
    • USA Market Data
    • Data Subscription
  • Jobs

U.S. natgas futures drop to 3-year lows on milder weather forecasts

January 21, 20209:32 AM Reuters0 Comments

U.S. natural gas futures fell to a fresh three-year low below $2 on Tuesday on forecasts for milder winter weather through early February than previously expected.

Low gas prices are a boon to consumers who pay less to heat homes and businesses, but are painful for energy companies – like EQT Corp , the nation’s biggest gas producer – forced to cut costs and reduce drilling activity to the lowest level in years.

Front-month gas futures for February delivery on the New York Mercantile Exchange (NYMEX) fell 8.7 cents, or 4.3%, to $1.916 per million British thermal units (mmBtu) by 11:16 a.m. EST (1616 GMT). In intraday trade, the contract fell to its lowest since March 2016.

Futures have collapsed 34% since hitting an eight-month high of $2.905 per mmBtu in early November on expectations inventories will remain over normal levels as near-record production and mild weather enables utilities to leave more gas in storage, eliminating concerns of shortages and price spikes this winter.

Lack of worry about supplies caused speculators last week to boost short positions on the NYMEX to an all-time high, which increased their net shorts on the NYMEX and Intercontinental Exchange to the highest on record, according to U.S. Commodity Futures Trading Commission (CFTC) data going back to 2010.

Looking ahead, analysts forecast gas prices at the Henry Hub benchmark in Louisiana would average $2.33 per mmBtu in 2020, their lowest since 1999. In 2019, average prices fell 18% to $2.57 from a four-year high of $3.15 in 2018.

U.S. gas production will rise to 94.7 billion cubic feet per day (bcfd) in 2020 from a record 92.0 bcfd in 2019 before falling to 94.1 bcfd in 2021 as relatively low prices prompt companies to keep cutting spending on new drilling, according to projections from the U.S. Energy Information Administration.

The weather in the U.S. Lower 48 states so far this winter has been much milder than usual with average daily temperatures 3 degrees Fahrenheit higher than normal in December and five degrees higher during the first few weeks of January.

Data provider Refinitiv projected average demand in the Lower 48 states, including exports, would drop from 131.3 bcfd this week to 119.9 bcfd next week. Traders noted prices collapsed on Tuesday because the outlook for next week is much lower than Refinitiv’s 129.4 bcfd forecast on Friday due to warmer forecasts.

Gas flows to LNG export plants, meanwhile, were expected to rise to a record high 9.4 bcfd on Tuesday from 9.2 bcfd on Monday, according to Refinitiv data. That compares with an average of 7.9 bcfd last week.

Follow the BOE Report
  • Facebook
  • Twitter
  • LinkedIn
Sign up for the BOE Report Daily Digest E-mail
Latest Headlines
  • Freehold Royalties Ltd. announces 2020 results and increases 2021 dividend and production guidance
  • Seven Generations Energy announces conditional redemption of all of its 6.750% senior notes due 2023, 6.875% senior notes due 2023 and 5.375% senior notes due 2025
  • Line 5 ‘very different’ from Keystone XL, Canada will fight hard for it, says O’Regan
  • Yangarra announces 2020 year end financials, operating results and reserves
  • Shell Canada employing ‘agile teams’ to power energy transition and reduce emissions

Return to Home
Alberta Gas
CAD/GJ
Market Data by TradingView





    Note: The page you are currently on will be sent with your report. If this report is about a different page, please specify.

    About
    • About BOEReport.com
    • In the News
    • Terms of Use
    • Privacy Policy
    Resources
    • App
    • Widgets
    • Notifications
    • Daily Digest E-mail
    Get In Touch
    • Advertise
    • Post a Job
    • Contribute
    • Contact
    • Report Error
    Featured In
    • CamTrader
    • Rigger Talk
    Data Partner
    • Foxterra
    BOE Network
    © 2021 Grobes Media Inc.