The mild winter weather, recent disruptions at LNG export plants, and a surge in production all contributed to the decline in natural gas prices, which closed at 151, down -1.82%. Analysts predict that due to the difficult market conditions, some producers may reduce their gas drilling operations.
According to Baker Hughes, the number of gas rigs fell by 23% in 2023, with only 120 rigs still in operation. Three more rigs have been brought offline already this year. According to the U.S. Energy Information Administration (EIA), during the week that concluded on February 2, utilities removed 75 billion cubic feet (bcf) of gas from storage.
Analysts had anticipated this outflow, but it is much less than the 208 bcf reduction from the same week last year and the 193 bcf five-year average for this time of year. Gas production in the Lower 48 states of the United States rose to an average of 105.6 bcfd in February from 102.1 bcfd in January, according to LSEG, but it is still below the record high of 106.3 bcfd in December.
More warmth than average is predicted for the Lower 48 states through February 15; from February 16 to 23, temperatures will primarily be close to below average. Technically speaking, the natural gas market is seeing new selling, as evidenced by the 1.11% rise in open interest that settled at 76,020. The price decrease was -2.8 rupees.
