Henry Hub Steadies After Rally on Drop in Production

Henry Hub steadies after the rally since late Feb triggered by falling domestic production and US producer output cuts. Curtailed LNG and Mexico export flows, muted demand due to mild weather and high storage are limiting upside moves.

• US Natgas APR 24 down -1.1% at 1.94$/mmbtu
• US Natgas SEP 24 down -0.8% at 2.61$/mmbtu
• US Natgas MAR 25 down -0.2% at 3.3$/mmbtu
• US domestic natural gas production was yesterday down again to 99.8bcf/d and now back in line with output seen this time last year according to Bloomberg. Some of the decline could be due to midstream maintenance but also from slowing E&Ps well starts and possibly from operational wells according to BofA.
• Feedgas flows to US LNG export terminals are today back up slightly to 13.4bcf/d according to Bloomberg but Sabine Pass supply is still about 0.3bcf/d below normal and Freeport flows about 0.9bcf/d below normal.
• Lower 48 natural gas demand is relatively unchanged at 78.5bcf/d today and still below the previous seasonal five year average. The US weather forecast shows warmer than normal temperatures across most of the country throughout the 6-14 day period.
• Export flows to Mexico have recovered very slightly to 4.0bcf/d compared to over 6bcf/d last week according to Bloomberg.