The CME/NYMEX prompt Henry Hub natural gas price yesterday settled at about $2.28/MMBtu, down 40 cents from the summer peak of $2.68 in mid-September. That’s also a long way down from the $3-plus prices seen at this time last year. What’s more, daily prompt-month contract settlements this injection season, from April to present, have averaged the lowest in over 20 years. This, despite the Lower-48 gas storage inventory starting the 2019 storage injection season in April well below year-ago and five-year-average levels. How did we get here? Today, we begin a short series breaking down the supply-demand fundamentals that brought the gas market to its knees in recent months.
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Records and extremes have been a running theme in the natural gas market this year. This past winter, we saw the highest price ever recorded in the U.S. gas spot market: $200/MMBtu at Sumas, WA. That was followed in the spring by the lowest prices ever recorded in the gas market: negative $8/MMBtu at the Waha Hub in West Texas (see Living in the Wild, Wild West for more on that). We’ve also continued to see record production and record demand, as well as exceptionally strong storage injections (discussed in Hot N Cold). Now, with less than a month of the official injection season left, there’s another “extreme” to mark down: some of the lowest natural gas futures prices seen in more than two decades. And not just for a day here and there, but on a monthly and even seasonal-average basis. Daily Henry Hub prompt futures settles from April through September this year averaged $2.41/MMBtu (yellow bar in Figure 1), the lowest seasonal average since the late 1990s, according to CME/NYMEX data from the Energy Information Administration (EIA).
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About the song
"I'm Tore Down" was written by blues pianist Sonny Thompson, who played on many early Freddie King songs. King, who was known as "Freddy" King early in his career, released the song as a single from his 1961 debut album, Freddy King Sings. The song reached #5 on the Billboard Hot R&B Singles chart. King later recorded a longer version of the song for his 1971 Shelter Records album, Getting Ready, which was produced by Leon Russell. In 1994, Eric Clapton included his version of "I'm Tore Down" on his From the Cradle blues tribute album.
Freddy King Sings had four singles that made it into the Billboard Hot R&B Singles charts. The album was recorded between August 1960 and July 1961 at King Studios in Cincinnati, and released in October 1961. Personnel on the record were: Freddie (Freddy) King (lead guitar, vocals), Sonny Thompson (piano), Fred Jordan (rhythm guitar), Ben Willis (bass), Phillip Paul (drums), Gene Redd (saxophone) and Clifford Scott (saxophone).
Freddie King was an American blues guitarist and singer. Born in Gilmer, TX, and raised in Chicago, King successfully blended Texas and Chicago blues influences into his own unique guitar style. He released 14 studio albums, and had 10 charting singles during his career. His playing influenced guitarists such as Eric Clapton, Mick Taylor, Peter Green and Stevie Ray Vaughan. King was inducted into the Rock and Roll Hall of Fame in 2012. He passed away in December 1976 at the age of 42.
