Yesterday’s natural gas price decrease of -0.07% to 146.8 was somewhat expected given the market’s ongoing struggles with a substantial surplus. However, expectations of milder weather for the coming week meant that demand for the commodity would likely increase, so the downside was limited.
Prices were also somewhat supported by increased gas flow to LNG export facilities, such as Freeport LNG. EIA data showing a significant 50 billion cubic feet (bcf) of gas added to storage during the week ending April 12 further supported the surplus story.
Remarkably, US gas production has decreased by almost 10% in 2024 due to drilling activity reductions and well completion delays by major energy companies including EQT and Chesapeake Energy. The Lower 48 US states’ gas output declined on Thursday, reaching a preliminary three-month low of 95.8 bcfd, indicative of energy companies’ coordinated attempts to control the surplus problem.
However, near-normal weather through April 26 and warmer-than-normal weather from April 27 to May 3 may make it difficult to rebalance supply and demand dynamics soon, according to meteorological estimates.
