Market Update: April 17, 2024

Weak demand and surplus supply continue to push natural gas prices lower despite production cuts. However, warmer temperatures in Texas and the Southwest could increase cooling demand, while cooler temperatures in the central, northern, and eastern parts of the country could boost heating demand this weekend. Warmer weather is expected next week.

The latest storage report from the EIA stated an increase of 24 BCF. The current inventory level now sits at 2.283 TCF, which is 23.5% higher than last year and 38.4% higher than the 5-year average.

According to Baker Hughes, the latest rig count dropped by three to 617 total rigs. Oil rigs fell by two and gas rigs fell by one. One year ago, the total rig count stood at 751 rigs.

This week’s additional graphic shows how mild winter (the warmest winter on record in the U.S. according to NOAA), low natural gas consumption, and high natural gas production have led to an abundant natural gas supply that could keep prices relatively low through 2025. However, the EIA expects natural gas prices to increase from March 2024 as production cuts and higher demand for electricity generation help align supply and demand more closely.