Market Update: April 3, 2024

Natural gas futures saw some gains in the last trading days as production declined and colder temperatures in central and eastern part of the country. However, traders are mindful of the coming spring weather and healthy storage supply. Demand for LNG production is also down as Freeport LNG export facility Trains 1 and 2 are still offline for inspections.

The latest storage report from the EIA stated a decrease of 36 BCF. The current inventory level now sits at 2.296 TCF, which is 23% higher than last year and 41.1% higher than the 5-year average.

According to Baker Hughes, the latest rig count dropped by three to 621 total rigs. Oil rigs fell by three while gas rigs remained the same. One year ago, the total rig count stood at 755 rigs.

This week’s additional graphic shows natural gas production increased by 4% in 2023. Appalachia, Permian and Haynesville accounted for 59% of natural gas production in the country. In 2024, the EIA expects a modest reduction in production because of low natural gas prices and a relatively stable rig count.