Market Update: March 13, 2024

Natural gas prices tried to rally this week on a cooler forecast for the end of March and as another producer announced production cuts. CNX Resources Corporation announced on Tuesday that they would be decreasing production in 2024 by about 30 BCF and reducing capital expenditures by about $50 million. They are also planning to delay the completion of 11 wells in the Marcellus region due to the weak price environment caused by oversupply. The latest weather forecast is also calling for some heating demand to linger for the next few weeks before the injection cycle begins.

The latest inventory report from the EIA stated a draw of 40 BCF bringing the new storage level to 2.334 TCF. The surplus is now 280 BCF above last year and 551 BCF above the 5-year average.

US inflation for January was reported at 3.8%, which was higher than the 3.7% that the market was expecting. This could factor into the timing of rate cuts by the US central bank as they have stated a target of 2% before they start acting.

According to Baker Hughes the latest rig count dropped by seven bringing the new total to 622 rigs. Oil rigs fell by two, gas rigs fell by four and miscellaneous rigs fell by one. One year ago, the total count sat at 746 rigs.

This week’s additional graphic shows crude oil production by country for 2023. According to International Energy Statistics, the United States has led all countries in oil production for the past six years in a row. It is being reported that United States produced 12.9 million barrels per day in 2023 breaking a new global record.