U.S. natural gas prices have been at their lowest ranges in a long time. On Monday, the near-month natural gas futures price at the New York Mercantile Exchange (NYMEX) settled at US$1.77/million Btu.
This price was the weakest February closing price for the near-month contract since at least 2001, in real terms, and the lowest near-month futures price in any month since 8 March 2016.
In addition, based on Natural Gas Intelligence (NGI) data, the daily spot value at the Henry Hub national benchmark was US$1.81/million Btu on February 10, the weakest worth in real phrases since 9 March 2016.
Henry Hub spot prices have floated between US$1.81/million Btu and US$2.84/million Btu this winter heating season, generally, because comparatively warm winter climate has reduced demand for natural gas for heating.
Natural gas production progress has ousted demand growth, lowering the need to pump natural gas from underground storage.
Dry natural gas production in January 2020 equated about 95 billion ft3/d, based on IHS Markit data. IHS Markit estimates that last month the U.S. noticed the third-highest month-to-month natural gas production on record, down barely from the previous two months.
IHS Markit estimates that US natural gas consumption by residential, commercial, industrial, and electric power sectors averaged 96 billion ft3/d for January, which was about 4.4 billion ft3/d less than the average for last January, largely due to decreases in residential and commercial consumption as a result of warmer temperatures.
Nevertheless, IHS Markit predicts that the overall consumption of natural gas averaged around 117.5 billion ft3/d last month, a rise of approximately 0.2 billion ft3/d from 2019. This total increase is due to the doubling of LNG feed gasoline to about eight.5 billion ft3/d.