It’s a double-whammy today for Henry Hub prices.
That’s what David Seduski, the head of North American gas at Energy Aspects, told Rigzone in an exclusive interview on Monday when asked why the U.S. natural gas price is up today.
“The first reason prices are higher is the 10 percent tariff President Trump put in place on Canadian energy imports,” Seduski told Rigzone.
“The U.S. imports approximately five to seven percent of its daily gas supply from Canada (depending on the time of year). A 10 percent tariff raises the cost of those imports by about $0.20 per million British thermal units (MMBtu),” he added.
“The volumes cannot be easily replaced by U.S. supply, given dry gas production basins in the U.S. have been operating with minimal rigs since the start of 2023 due to low gas prices (low gas prices before the January cold, that is),” he continued.
“So, with the marginal molecule for multiple markets in the U.S. West and Midwest now twenty cents more expensive, the whole curve is being dragged up to some degree,” Seduski went on to state.
The the head of North American gas at Energy Aspects told Rigzone that the second impact on Henry Hub prices today is more straightforward.
“Last week’s weather forecast showed a mild start to February, with heating degree days expected to be 14 percent below the 10-year normal,” he said.
“That trend reversed itself slightly over the weekend. Now, the middle of February looks set to be relatively close to normal, which for February would mean additional heating demand,” he added.
“That potential cold and extra demand is also helping support prices today,” Seduski went on to state.
In a separate exclusive interview with Rigzone on Monday, Art Hogan, Chief Market Strategist at B. Riley Wealth, highlighted that “U.S. natural gas futures rose eight percent to $3.287 per MMBtu today, recovering from an 11.8 percent drop the last week, following President Trump’s announcement on Saturday to impose tariffs on Canadian and Mexican oil, which raised concerns about supply disruptions”.
“The tariffs are set at 25 percent for Mexican oil and 10 percent for Canadian energy products. Street estimates say Canadian natural gas exports to the U.S. could drop by around 0.16 billion cubic feet per day due to these tariffs,” he added.
“Additionally, the Energy Information Administration reported a massive gas withdrawal of 321 billion cubic feet due to extreme cold, exceeding both last years and the five-year average,” he continued.
In another exclusive interview on Monday, Phil Flynn, a senior market analyst at the PRICE Futures Group, told Rigzone that U.S. natural gas prices were rising “because of the concerns about the tariffs”.
“The U.S. imports a lot of natural gas and that is having an impact on the supply,” he added.
“At the same time there are some weather forecasts for some cold temperatures coming in and that is also playing into the market rally today,” Flynn continued.
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