Henry Hub Extends Decline on Switch to Warmer Weather Next Week

Henry Hub extends the decline from yesterday falling by as much as 9% earlier today from the close on Friday driven by the return of warm weather in the US next week. Current severe cold is driving higher domestic demand but also a drop in production and lower LNG feedgas flows.

• US Natgas FEB 24 down -7.6% at 3.06$/mmbtu (vs Jan 12 close)
• US Natgas JUL 24 down -4.6% at 2.76$/mmbtu
• US Natgas JAN 25 down -2.4% at 4.01$/mmbtu
• Domestic natural gas demand is holding near the highest since late December 2022 at 128.4bcf/d today according to Bloomberg driven by severe cold this week. Demand is expected to drop into next week with the return on warmer weather for the end of Jan. The latest NOAA forecast is showing above normal temperatures across the country in the 6-14 day period.
• Feedgas flows to US LNG export terminals fell to its lowest level since June at 10.7bcf/d, yesterday and still down at 11.45bcf/d today according to Bloomberg data.
• US natural gas production yesterday fell to the lowest since Dec 2022 at 92.78bcf/d according to Bloomberg with pipeline flows from all US production basins falling amid the current severe cold. Kinder Morgan's El Paso Natural Gas pipeline warned of "strained operating conditions" as Permian Basin spot production operated at 93% of scheduled volumes. Extreme cold and linked operational issues have resulted in North Dakota’s oil output falling by up to 425kb/d,
• Export flows to Mexico are steady today at 6.0bcf/d.