US natural gas closed at its lowest price in more than 2 years on the New York market Jan. 29 following the government’s weekly gas storage report, which showed storage levels fell less than some analysts had expected.
The New York Mercantile Exchange gas contract for March settled down 12.3¢ to $2.72/MMbtu on the New York Mercantile Exchange. It was the lowest front-month settlement since Sept. 7, 2012, when gas fell to $2.68/MMbtu.
The US Energy Information Administration estimated gas in underground storage across the Lower 48 at 2.54 tcf as of Jan. 23.
That represented a net decline of 94 bcf from the previous week. Stocks were 324 bcf higher than last year at this time but 79 bcf below the 5-year average of 2.62 tcf, EIA said in its weekly gas storage report.
Stephen Smith, energy consultant in Natchez, Miss., said the gas price serves as another reminder of a severely oversupplied market.
“You might get weather situations that make it…look like a balanced market,” Smith said. “The truth is, underlying this whole thing, you can’t grow production (at this) rate and not be oversupplied.”
The NYMEX March crude oil contract gained 8¢ on Jan. 29, closing at $44.53/bbl. The April contract rose 7¢ to $45.30/bbl.
On the cash gas market, the Henry Hub, La., hub gas price dropped by 1¢ to $2.88/MMbtu on Jan. 29.
Heating oil for February delivery declined 1.3¢ to a rounded $1.62/gal. Reformulated gasoline stock for oxygenate blending for February was up less than a penny to a rounded $1.35/gal.
The March ICE contract for Brent crude oil gained 66¢ to settle at $49.13/bbl. The April contract was up 56¢ to $50.15/bbl. The ICE gas oil contract for February dropped $5 to $473.50/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Jan. 29 was $43.88/bbl, down 20¢ from the previous day.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.