Why Has the USA Natural Gas Price Been Dropping Lately?
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Natural gas prices are drifting lower after failing to break out above a key technical level at $3.40 per million British thermal units (MMBtu) last week.
That’s what Art Hogan, Chief Market Strategist at B. Riley Wealth, said in an exclusive interview with Rigzone on Wednesday, when asked why the U.S. natural gas price has been dropping lately.
“While the weather remains colder than usual, especially in the Northeastern U.S., which is the biggest driver of natural gas demand, the current driver of the commodity seems to be technical versus fundamental,” he added.
Hogan warned that the next level of major technical support is $2.80 per MMBtu.
When he was asked why the U.S. natural gas price has been dropping lately in a separate exclusive interview with Rigzone, Phil Flynn, a Senior Market Analyst at the PRICE Futures Group, flagged “talk about a warmup” in temperature.
“Even as most of the country is freezing and being hit with winter storms, talk about a warmup is reversing … focus back from demand to supply,” Flynn said.
“Because of lofty supply levels, the market needs at the very least a normal winter to draw down supply,” he added.
“Talk of a warmup is giving the market concerns that the recent pattern of warmer than normal winters has not ended,” he continued.
Flynn told Rigzone that “it was also not helpful to see a big drop in Euro zone manufacturing”.
In its latest weekly natural gas storage report, which was released on November 27 and included data for the week ending November 22, the U.S. Energy Information Administration (EIA) revealed that “working gas in storage was 3,967 billion cubic feet as of Friday, November 22, 2024, according to EIA estimates”.
“This represents a net decrease of two billion cubic feet from the previous week. Stocks were 134 billion cubic feet higher than last year at this time and 267 billion cubic feet above the five-year average of 3,700 billion cubic feet,” it added.
“At 3,967 billion cubic feet, total working gas is above the five-year historical range,” the EIA’s latest weekly natural gas storage report noted. The EIA’s next weekly natural gas storage report is scheduled to be released on Thursday and will include data for the week ending November 29.
A research note sent to Rigzone on November 29 by the JPM Commodities Research team showed that J.P. Morgan expects the U.S. natural gas Henry Hub price to average $2.75 per MMBtu in the fourth quarter of this year and $2.37 per MMBtu overall in 2024.
A report sent to Rigzone by Standard Chartered Bank Commodities Research Head Paul Horsnell on November 5 showed that Standard Chartered expected the NYMEX basis Henry Hub U.S. natural gas nearby future price to average $2.70 per MMBtu in the fourth quarter.
Subsequent Standard Chartered Bank reports sent to Rigzone by Horsnell have not included fourth quarter NYMEX basis Henry Hub U.S. natural gas nearby future price projections. Quarterly price projections for the commodity in these reports range from the first quarter of 2025 to the first quarter of 2026.
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas