Market Update: March 6, 2024

Natural gas prices futures rallied this week as another large producer announced production cuts due to the low-price environment. EQT Corp. stated on Monday that they would be reducing production by approximately 1 BCF per day in response to lower natural gas prices caused by mild weather and elevated storage levels. The goal for EQT is to reduce production by 30-40 BCF during the first quarter of 2024 and reassess the market conditions at the end of March. This announcement comes as Chesapeake Energy Corp. stated intentions for production cuts in 2024 in their latest earnings release.

The latest weather forecasts continue to be mild as heating demand has fallen roughly 23 BCF since Friday.

The latest storage report from the EIA stated a draw of 96 BCF bringing the current inventory level to 2.374 TCF. One year ago, the inventory level was at 2.126 TCF while the 5-year average stood at 1.876 TCF.

According to Baker Hughes the latest rig count rose by three to 629 total rigs. Oil rigs rose by three, miscellaneous rigs rose by one and gas rigs fell by one. One year ago, the total rig count stood at 749 rigs.

This week’s additional graphic from Refinitiv Eikon via the EIA highlights the weakness that occurred in the Henry Hub spot price for February. Prices on February 20, 2024, was the lowest price adjusted for inflation since 1997.