U.S. Gas Prices Ease On Record Output

U.S. natural gas futures eased to a two-week low on Monday amid record output, negative spot prices at the Waha Hub and forecasts for mild weather. Natural gas at the Waha hub–a regional pricing hub for gas in the Permian Basin in West Texas–sold for near-zero or sub-zero prices for much of 2024, a trend that has continued in the current year. Indeed, prices at the hub spent 164 days in negative territory and hit an all-time low -$7/mmbtu at the end of August, truly historical lows. The Permian Shale boom led to a surge in associated gas production, with output growing more quickly than takeaway capacity. Consequently, Permian gas infrastructure has become saturated in recent years, effectively meaning that producers sometimes have to pay for someone to take their gas so that they can continue to produce something more valuable: crude oil.

Gas inventories, however, remained about 12% below normal levels for this time of year after extreme cold in January and February. U.S. natural gas futures dropped 1.3% to $4.058 per million British thermal units (mmBtu) at 11.15 am ET, putting the contract on track for its lowest close since February 28.

‘;
document.write(write_html);
}

The price decline came despite robust LNG gas flows. Gas flows to U.S. LNG export plants clocked in at 15.6 bcfd, matching last month’s record. The latest EIA report revealed that U.S. utilities withdrew 62 bcf of gas for the week ending March 7, exceeding forecasts of 50-55 bcf. This further depressed storage, with inventory levels 27% lower than a year ago and 11.9% below the five-year average. Near-record output has, however, continued to cap gains, with output in the Lower 48 states hitting 105.7 bcfd in March, surpassing February’s record of 105.1 bcfd.

Similarly, European natural gas futures dipped to €41.7/MWh, easing after last week’s 9% rally, as traders weighed ceasefire negotiations between Ukraine and Russia. However, hopes for a swift resolution to the Ukraine war and potential restoration of Russian gas flows remain dim.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com

 

  • Related Posts

    USA EIA Boosts Henry Hub Natural Gas Price Forecasts

    The U.S. Energy Information Administration (EIA) increased its Henry Hub spot price forecast for 2025 and 2026 in its latest short term energy outlook (STEO), which was released recently. According…

    Chevron Buys 5% in Hess, Signals Merger Going as Planned

    Chevron has bought a stake of 4.99% in Hess Corp since the start of the year, according to a regulatory filing from this week. The company said it is confident…

    Have You Seen?

    UK opposition party reverses course on Net Zero

    • March 18, 2025
    UK opposition party reverses course on Net Zero

    CO2 Summit: Air Products backs biogenic CO2 to manage ammonia supply risk

    • March 18, 2025
    CO2 Summit: Air Products backs biogenic CO2 to manage ammonia supply risk

    China Halts US LNG Imports as Trade War Reroutes Deliveries

    • March 18, 2025
    China Halts US LNG Imports as Trade War Reroutes Deliveries

    It’s About Land & Power Plants: Putin Will Talk to Trump on Tuesday by Phone, Kremlin Says

    • March 18, 2025
    It’s About Land & Power Plants: Putin Will Talk to Trump on Tuesday by Phone, Kremlin Says

    Partners in $2.2 Billion Deal to Buy California Gas Plants

    • March 18, 2025
    Partners in $2.2 Billion Deal to Buy California Gas Plants

    USA EIA Boosts Henry Hub Natural Gas Price Forecasts

    • March 18, 2025
    USA EIA Boosts Henry Hub Natural Gas Price Forecasts

    China Stops Buying U.S. LNG

    • March 18, 2025
    China Stops Buying U.S. LNG

    Oil Prices Jump as Israel Pounds Gaza Again After Ceasefire Deal Falls Apart

    • March 18, 2025
    Oil Prices Jump as Israel Pounds Gaza Again After Ceasefire Deal Falls Apart

    Chevron Buys 5% in Hess, Signals Merger Going as Planned

    • March 18, 2025
    Chevron Buys 5% in Hess, Signals Merger Going as Planned

    Funding and carbon markets key to lowering CCUS costs, argues industry body

    • March 18, 2025
    Funding and carbon markets key to lowering CCUS costs, argues industry body