You wouldn’t know it from the $2.50-plus/MMBtu Henry Hub prompt natural gas futures prices in the past couple of months, but the U.S. gas market this injection season just barely managed to avoid a complete meltdown. Despite gas production volumes trailing year-ago levels all summer long, it wasn’t until the last month or two of the traditional injection season (April through October) that the market tightened enough to escape a major storage crunch. In reality, it took the multi-pronged effects of production cutbacks — in part from hurricane-related disruptions — higher LNG and pipeline exports, and cooler fall weather, to make that happen. Today, we review the U.S. natural gas supply/demand balance and implications for 2021.
The Lower 48’s natural gas market has come a long way since the early days of summer. Less than six months ago, the prompt gas futures prices were scraping along 25-year lows just below $1.50/MMBtu, and the storage inventory was carrying a hefty 600-plus-Bcf surplus vs. last year that, if it lingered through fall, threatened to test the U.S. storage capacity limit. By the end of October, however, the traditional threshold between injection season and the winter withdrawal season, that surplus had been whittled down to less than 200 Bcf; the November prompt contract expired just shy of $3/MMBtu; and December futures stepped into prompt position at upwards of $3.30/MMBtu, which was the highest we’ve seen during October trading in six years. That bullishness has receded in November with the warmer-than-normal weather and rising storage surplus, but prices remain at a premium to year-ago levels.
Figure 1 below summarizes the average year-on-year changes for each of the supply-demand components that make up the balance during the April-October period. These comparisons provide a quick glance at the relative tightening or loosening of the supply-demand balance versus last year and are based on the historical data behind RBN’s NATGAS Billboard report. The report provides a daily assessment of U.S. natural gas supply, demand, storage, and pricing, using pipeline flows, weather, and our historical supply-demand and storage models, which incorporate the latest monthly data from the Energy Information Administration (EIA). The red bars in the graph indicate a decline vs. last year, while the blue bars show a positive change to last year.
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About the song
"Extreme Ways" was written by Moby and appears as the ninth song on Moby's sixth studio album, 18. Released as the second single from the album in July 2002, the song went to #12 on the Billboard Dance Club Songs Singles chart. It appears in the conclusion of all five of the Bourne films, the Korean game show, The Genius, and an episode of The Simpsons television show. Personnel on the record was: Moby (all instruments and vocals).
18 was recorded at Moby's home studio on Mott Street in New York City between 2000 and 2002. It was released in May 2002, and it went to #1 on the Billboard Top Dance/Electronic Albums chart and to #4 on the Billboard Top 200 Albums chart. It has been certified Gold by the Recording Industry Association of America. Six singles were released from the album.
Moby (Richard Melville Hall) is an American musician, songwriter, singer, producer, and animal rights activist. He is one of the most influential dance music artists of the 1990s. He has released 17 studio albums, one live album, four compilation albums, four EPs, and 72 singles. He has sold more than 20 million records worldwide. He is also the author of four books. He has won one MTV Video Music Award, one BMI Award, two Billboard Music Awards, and a Person of the Year Award from the Veggie Awards. Moby still records, tours, and supports animal rights.
