Market Watch

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April gas futures crashed through a $2.40 floor Friday, falling 17.6¢ to settle at $2.338 per million Btu, as concerns about abundant supply weighed on the market despite unseasonably cold weather. The contract has fallen 67.1¢ since hitting $3 just two weeks ago. While some Haynesville Shale producers have announced they would drop rigs in response to low prices, and some Appalachian producers have said they would aim to keep production steady in 2023 with flexibility to slow production if prices fall far enough, an upstream response isn't evident in the US rig count. "Producers could eventually shut-in wells later this year if gas prices stay low,” East Daley analysts wrote. “In 2020, we saw EQT respond to poor spot pricing by shutting in one-third of its production when Dominion South [now Eastern Gas South] prices fell below $1.40/MMBtu. On the other hand, Antero Resources claimed resilience to low prices in Appalachia, given a strong portfolio of firm transport (FT) on pipelines out of the basin and low break-even economics for its acreage. EQT noted that while some of its peers were slimming their FT capacity, EQT was expanding its own.” But Appalachian spot gas prices are well above that level now.

Gas Demand, Gas Inventories, Gas Supply, Gas Prices, Gas Pipelines
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Fri, Mar 31, 2023
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