US Extends Decline to Fall 26% From High Last Week

Front month US Natgas declines once again to the lowest since April 2021. Prices have now fallen 26% from a high last week and 62% from a high in December due to high production, healthy storage, moderate demand and curtailed LNG exports.

• US Natgas MAR 23 down -1.8% at 2.63$/mmbtu
• Production dipped slightly yesterday to 99.76bcf/d but remains above levels around 96bcf/d this time last year. EIA expect natural gas production in both the Permian and Haynesville regions to grow with the completion of pipeline infrastructure expansions in 2023 and 2024. Earlier this month the EIA drilling productivity report forecast natural gas output in the seven US shale basins to increase by 0.466bcf/d to 96.656bcf/d in February.
• Domestic demand is today expected above normal at 110.9bcf/d. The latest two week NOAA weather forecast shows above normal temperatures across central and eastern areas but below normal in the west.
• Deliveries to US LNG export terminals are today expected at 12.8bcf/d. Freeport LNG is still offline with many analysts not expecting a restart until at least the end of Feb.