All articles tagged with #us natural gas
Oil prices dropped below $70 following a fragile ceasefire between Israel and Iran, easing fears of Strait of Hormuz closure, while US energy demand surged amid high temperatures. Major developments include US LNG capacity expansion, record Indian oil imports, and Canada's first LNG export, alongside geopolitical tensions affecting Iraq and Niger, and China's record solar capacity growth.
US natural gas prices have hit a 30-year low, causing significant challenges for producers. BKV Corp, a major player in the industry, has seen its ambitious expansion plans derailed by the price drop, leading to stalled IPO plans and a scuttled carbon joint venture. The relentless expansion of US natural gas output, particularly from oil companies, has overwhelmed efforts to curtail drilling, resulting in a price drop that has hurt producers. However, there is hope that future LNG exports and rising demand could restore profitability to the industry by 2025, despite potential delays in new LNG plant permits.
The US natural gas market is struggling, with Henry Hub trading at its lowest since the early months of the pandemic at $1.74 for March delivery, and prices below $2 extending through May. Despite these low prices, natural gas production continues to exceed last year's supply, leading to a challenging market outlook. The situation is not expected to improve soon, as weather forecasts indicate mild conditions, prompting concerns that sub-$1 prices may be necessary to bring discipline to the market.
US natural gas supplies have dropped significantly due to extreme cold, leading to record demand for heating and power. The Electric Reliability Council of Texas (ERCOT) urged conservation efforts as electricity demand was expected to surpass all-time highs. Gas production in key areas like the Permian Basin and North Dakota's Bakken shale field was affected, while power prices soared to multi-year highs across the US and Canada.
Despite US natural gas prices hitting a 30-month low, gas output continues to rise due to the increase in gas that comes up with oil in the biggest shale fields, such as the Permian basin. While some gas producers are reducing drilling, oil producers are not cutting back. The surplus of gas in US storage is about 21% higher than usual for this time of year, and the projected US gas usage will ease this year despite an expected 14% increase in US liquefied natural gas exports.
US natural gas prices have fallen to a 30-month low, but output continues to rise due to the high amount of gas produced from oil wells, which is unlikely to decline given current oil prices. While some gas producers have cut drilling, gas that comes up with oil will continue to rise in the biggest shale fields. Despite low gas prices, US drillers have 160 rigs seeking gas, up 16% from a year ago. The surplus of gas in US storage will set up inventories to reach record highs before next winter's heating season.