Market Updates

Market Update: January 31, 2024

NYMEX natural gas prices took a roller coaster ride in the last trading week of January as the March contract moved to the prompt position. On Monday, the February NYMEX experienced a decline influenced by mild weather forecasts and a soft cash market prevailing in much of the mid-continent.

Storage continues to be in focus as the latest storage report from the EIA stated a draw of 326 BCF. This was only the third withdrawal over 300 BCF in the last 14 years. The large pull cut into the surplus as current inventory levels are now 110 BCF above last year and 142 BCF above the 5-year average. Another above average draw is expected in this week’s report before more seasonal to bearish reports could be in store.

Finally, the Biden Administration froze new permit authorizations for new LNG export projects on Friday. The move could impact roughly ten projects in North America representing about 20 BCF per day of increased export capacity. The administration lists climate impact and national security as reasons for the pause. There is no timeline as to when the pause may be lifted.

NYMEX Natural Gas Futures

Electric Pricing Forward Calendar Strips

Working gas in underground storage compared with the 5-year maximum and minimum | EIA

Temperature Outlook: February 7-13, 2024 | NOAA

Crude oil prices rallied this week as tension in the middle east rose as three American troops were killed and thirty-four wounded at a US base in Jordan. An Iranian backed militia operating out of Syria is believed to be responsible for the attack. The transport routes in the Red Sea also continue to be unstable as an oil tanker was reportedly attacked on Friday.

According to Baker Hughes the total rig count rose by one last week to 621 rigs. Oil rigs rose by two as gas rigs fell by one. One year ago, the total rig count sat at 771 rigs.

This week’s additional graphic from the EIA is sourced from S&P Global Commodity Insights and illustrates the record dry gas production in the United States for December 2023. Production rose to 105.5 BCF per day which was nearly at four percent increase from 2022.

Monthly U.S. Lower 48 states natural gas production (Jan 2018-Dec 2023) | S&P Global Commodity Insights

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