Natural Gas Declined Despite Near-Record Production

Natural gas ended the week at 133.3, a minor decrease of -0.22%, as the market was influenced by near-record output and a smaller-than-expected storage removal the previous week. Because warmer-than-normal weather suppressed heating demand, U.S. utilities removed 49 billion cubic feet of natural gas from storage, falling short of market estimates of a 67 bcf draw.

According to the data, the present level of petrol in storage is 15.9% more than the seasonal average. Compared to the prior year, the U.S. Energy Information Administration (EIA) predicted an average natural gas spot price increase in 2024 and 2025; however, it is anticipated to stay below the $3.00 per million British thermal units (MMBtu) threshold.

The EIA predicts that in 2024, demand will climb by 2.3 billion cubic feet per day (Bcf/d) but supply will remain largely constant, leading to an increase in natural gas prices. It is anticipated that in 2025, supply and demand will increase at comparable rates, with supply slightly outpacing demand.

While gas flaring decreased, North Dakota’s natural gas production hit a record high of 3.525 billion cubic feet per day (bcfd) in December, above the previous high of 3.469 bcfd in November. A 5.1% drop in open interest to 68584 and a -0.3 rupee decline in prices indicate that the market underwent extended liquidation from a technical perspective.

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