The U.S. Power Info Administration (EIA) lower its Henry Hub spot value forecast in its newest quick time period power outlook (STEO), which was launched this week.
In its newest March STEO, the EIA initiatives that the commodity will common $2.20 per million British thermal items (MMBtu) within the first quarter of this 12 months, $1.79 per MMBtu within the second quarter, $2.28 per MMBtu within the third quarter, $2.82 per MMBtu within the fourth quarter, and $2.27 per MMBtu total in 2024.
In its earlier February STEO, the EIA forecast that the Henry Hub spot value would common $2.67 per MMBtu within the first quarter of 2024, $2.20 per MMBtu within the second quarter, $2.66 per MMBtu within the third quarter, $3.08 per MMBtu within the fourth quarter, and $2.65 per MMBtu total in 2024.
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“The U.S. benchmark Henry Hub pure fuel spot value averaged an inflation-adjusted record-low of $1.72 per MMBtu in February,” the EIA acknowledged in its March STEO.
“We forecast costs will keep below $2.00 per MMBtu within the second quarter of 2024 (2Q24) as a result of we anticipate pure fuel inventories will stay excessive relative to the five-year common as the US enters the shoulder season when there’s usually much less U.S. pure fuel consumption than at different occasions of the 12 months,” it added.
“In our March STEO, the annual common Henry Hub value for all of 2024 averages virtually $2.30 per MMBtu, 14 p.c decrease than in our February STEO,” the EIA continued.
The EIA famous in its March STEO that this winter, which it outlined as November 2023 to March 2024, has been gentle all through a lot of the U.S. and acknowledged that the nation has skilled eight p.c fewer heating diploma days (HDDs) than the 10-year common.
“February was a lot milder than anticipated, with 9 p.c fewer HDDs than forecast in final month’s STEO,” the EIA stated within the STEO.
“Due to the gentle climate, we estimate mixed residential and business sector consumption of pure fuel this winter might be three billion cubic toes per day (Bcfpd), which is 9 p.c lower than the earlier five-year winter common,” it added.
“Diminished pure fuel consumption for house heating and elevated U.S. dry pure fuel manufacturing, which we estimate might be about three Bcfpd extra this winter in contrast with final winter, have contributed to above-average inventories,” it continued.
In its newest STEO, the EIA revealed that it expects U.S. inventories of pure fuel will complete 2,270 billion cubic toes on the finish of the winter heating season on March 31. The group highlighted within the STEO that that is 37 p.c above the earlier five-year (2019–2023) common for March, “contributing to traditionally low pure fuel costs and to our expectation of low costs for the subsequent a number of months”.
In a fuel and LNG market replace despatched to Rigzone early on Thursday, Rystad Power Senior Analyst Masanori Odaka stated Henry Hub costs had been down 13 p.c to roughly $1.7 per MMBtu on March 12 “on the tail finish of the winter demand season”.
“Nevertheless, the market is approaching the ground for spot fuel costs following latest information that Chesapeake Power and EQT Company have curtailed fuel manufacturing,” Odaka added within the replace.
“This has began to materialize in Appalachia manufacturing ranges, which have declined from highs of 35 Bcfpd in January to round 34 Bcfpd at the moment,” Odaka continued.
In that replace, Odaka famous that Decrease 48 fuel storage continues to exceed the five-year vary, “making certain there’s a short-term ceiling for costs and that withdrawals stay modest attributable to gentle late-winter temperatures”.
“Storage ranges are actually 13.6 p.c greater than in 2023 and almost 31 p.c greater than the five-year common. Late-winter temperatures are too gentle to considerably affect storage,” Odaka stated.
In a report despatched to Rigzone this week, Customary Chartered projected that the NYMEX foundation Henry Hub close by future value will common $4.80 per MMBtu throughout the primary and second quarters of 2024 and $4.70 per MMBtu throughout the third and fourth quarters.
J.P Morgan forecast in a report despatched to Rigzone on February 26 that the U.S. pure fuel Henry Hub value will common $2.45 per MMBtu within the first quarter of this 12 months, $2.25 per MMBtu within the second quarter, $3.00 per MMBtu within the third quarter, $4.00 per MMBtu within the fourth quarter, and $2.93 per MMBtu total in 2024.
To contact the creator, e mail andreas.exarheas@rigzone.com
