Market Update: April 10, 2024

Natural gas May contract continues to rise as production declines. Despite this, healthy storage levels keep downward pressure on prices. The EIA reported that the U.S. ended the natural gas withdrawal season with 39% more in storage compared to the five-year average. The EIA forecasts that less natural gas will be injected into storage from April through October due to lower production in the 2nd and 3rd quarters of this year. However, the EIA expects that we will see the most natural gas in storage in November when winter withdrawal season begins.

The latest storage report from the EIA stated a decrease of 37 BCF. The current inventory level now sits at 2.259 TCF, which is 23% higher than last year and 38.9% higher than the 5-year average.

According to Baker Hughes, the latest rig count dropped by one to 620 total rigs. Oil rigs increased by two, while gas rigs and miscellaneous rigs each fell by two and one, respectively. One year ago, the total rig count stood at 751 rigs.

This week’s additional graphic shows the United States as the largest liquefied natural gas (LNG) exporter in 2023, with exports averaging 11.9 Bcf/d, a 12% increase compared to 2022. Europe (including Turkey) imported 66% of the U.S. LNG exports, while Asia accounted for 26%, and Latin America and the Middle East accounted for 8% combined.