Market Updates

Market Update: May 8, 2024

Natural gas futures have seen gains for the past four trading days due to lower production and higher LNG demand. The EIA forecasts production in 2Q to decrease by 2% from 1Q. The EIA also noted the price difference between natural gas and petroleum products is prompting producers to prioritize extraction of higher-value hydrocarbon liquids.

The latest storage report from the EIA stated an increase of 59 BCF. The current inventory level now sits at 2.484 TCF, which is 21.3% higher than last year and 34.9% higher than the 5-year average.

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: May 15-21, 2024 | NOAA

According to Baker Hughes, the latest rig count decreased by eight to 605 total rigs. Oil rigs fell by seven, gas rigs fell by three and miscellaneous rigs increased by two. One year ago, the total rig count stood at 748 rigs.

This week’s additional graphic shows how natural gas-fired electricity has consistently risen since 2021. This increase is due to coal retirements, capacity expansion in natural gas-fired plants and low natural gas prices in 2023. Furthermore, natural gas’ share of off-peak generation increased by 22% between 2021 and 2023, displacing coal-fired units during nighttime hours.

Lower 48 states annual average natural gas generation by hour of dispatch (Jan 1, 2021-Dec 31, 2023) | EIA

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