U.S. domestic producers continue to be optimistic about the long-term prospects of gas as a fuel.
This month, the spot natural gas prices at the Waha hub in West Texas, in the Permian, have been negative, sinking to as low as -$1.16 per million British thermal units.
U.S. natural gas producers and pipeline operators acknowledge there is an oversupply hanging over the market, but they believe that gas will continue to be in demand domestically and internationally for decades to come.
Some industry experts believe conflict in the Middle East may cause gas prices in the U.S. to increase over the next six months to a year.
Editor OilPrice.com
Tue, December 19, 2023 at 7:30 PM GMT·2 min read
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+1.1637%
The benchmark U.S. natural gas prices fell by 3% early on Tuesday after the latest models overnight showed that most of the U.S. will see warmer than normal temperatures over the next week.
Record temperatures in Europe and North America extended the gas storage refill season, leading to high inventories.
Natural gas demand decreased due to warmer weather, an industrial slowdown in Europe, and record U.S. production and LNG exports.
Futures and options market winter premiums have diminished, contributing to a drop in Europe’s natural gas prices and bearish trends in the U.S. and Asian markets.
Europe’s gas storage is full, but rising winter demand and Asian market competition could drive prices up.
Natural gas prices in the United States fell to a 30-month low last week, dropping to $2 per mmBtu. And, while some producers have curbed drilling, the surplus isn’t going away anytime soon.
U.S. President Joe Biden escalated the rhetoric against oil companies on Wednesday, telling them in a letter to produce more gasoline and lower gasoline bills for American consumers.