With producers actively working to reduce output in the face of a difficult market, natural gas saw a significant increase of 3.7%, ultimately settling at 151.2. A dramatic drop in prices prompted Chesapeake Energy and other major gas producers, such as Antero Resources, Comstock Resources, and EQT, to announce large reductions to their 2024 output projections.
Despite these initiatives, dealers are still having to deal with an abundance of supplies, high storage levels, and a low demand for heating as a result of the mild winter. The market had anticipated a draw of 64 billion cubic feet of natural gas from storage, but U.S. utilities only pulled out 60 billion cubic feet in the week that concluded on February 16.
The reduction increased total inventories to 2.470 trillion cubic feet (tcf), 451 bcf more than the five-year average. Due to above-average temperatures, plentiful fuel storage, and nearly record output, U.S. natural gas prices have fallen to their lowest point since June 2020, at $1.522/MMBtu.
Further limiting the flow of gas to LNG export terminals were technical problems at Freeport LNG’s export facility. The natural gas market is technically seeing short covering, as shown by the -4.62% decline in open interest that resulted in a settlement at 65311, along with a 5.4 rupee price hike.
