Production of natural gas in the Permian Basin was back at its pre-freeze off level all week after being reduced from January 19 through January 22. Production ranged from 20.32 Bcf/d to 20.57 Bcf/d and averaged 20.46 Bcf/d for the week ended February 3. This is up 0.27 Bcf/d from the average of the prior week. Warm weather has returned to the basin and there is currently no risk of production freeze-offs given the two-week weather forecast. In January, production in the basin averaged 20.3 Bcf/d, about the same as the month prior and nearly 2 Bcf/d above January 2024 because of strong year-on-year production growth driven by new pipeline buildout and also because January last year experienced much more production disruptions due to cold weather.
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Heat of the Moment - High Gas Production, Historically Low Heating Demand Keep a Lid on Prices
So far this winter, front-month CME/NYMEX natural gas futures have fallen, risen and fallen again but, until their most recent dip, generally remained within the same $2.30-to-$3.30/MMBtu range where they have been lingering since mid-2023. With production sustaining near-record levels, LNG export volumes down from the winter highs, and temperatures back to normal, the supply of gas remains plentiful — a bearish scenario. In today’s RBN blog, we look at why there’s been a lid on natural gas prices — and the odds that the situation might change before the rapidly-approaching end of the winter season.
Q2 2024 Diversified E&Ps' Financial Results
<p>(Note: Each column is sortable by clicking once or twice on the column title. For example, clicking on "Revenue" will rank the companies either low-to-high or high-to-low.)</p>
Wild, Wild West - Natural Gas Price Blowouts Signal Worsening Westbound Supply Constraints
Last week, even as natural gas day-ahead prices went negative in the Permian’s Waha Hub in West Texas, spot prices at northern California’s PG&E Citygate last week traded at a record-smashing $55/MMBtu, according to the NGI Daily Gas Price Index — close to 100x the Waha price. Other hubs west of the Continental Divide also surged to record levels, while markets just east and north of there were largely unruffled — a sure sign of bottlenecks for moving gas into West Coast markets. This is just the latest instance of severe gas supply shortages and constraint-driven price disruptions out West in recent years (even ignoring Winter Storm Uri and the Deep Freeze of February 2021). Moreover, it’s arguably taking progressively more benign market events to trigger similar or worse shortages. What’s going on? In today’s RBN blog, we break down the factors driving the latest Western U.S. gas price spikes.
