Market Update: March 20, 2024

As the vernal equinox marked an official end to a mild winter on Tuesday, April NYMEX natural gas futures saw some gains with forecasts of near-term cold weather in the northern part of the country, leading to expected increase in heating demand from the residential/commercial sector. However, despite the expected slight increase in short-term demand, production continues to decline after producers announced cutbacks due to weak prices.

The latest storage report from the EIA stated a decrease of 9 BCF. The current inventory level now sits at 2.325 TCF, which is 16.9 percent higher than last year and 37.1 percent higher than the 5-year average.

According to Baker Hughes the latest rig count increased by seven to 629 total rigs. Oil rigs rose by six and gas rigs rose by one. One year ago, the total rig count stood at 754 rigs.

This week’s additional graphic shows natural gas intrastate pipeline capacity additions by type from 2017 to 2023. In 2023, intrastate pipelines capacity increased by 5.2 billion Bcf/d, while interstate pipeline capacity additions totaled less than 1 Bcf/d.