The Hunt for White Hydrogen Has Begun
The Hunt for White Hydrogen Has Begun | OilPrice.com
1. US Natural Gas Production Is Suffering but Hopes for a Swift Rebound in 2025
- Cash prices of Henry Hub plunged to their lowest since the early 1990s as mild weather and high gas inventory levels sent the US benchmark spiraling down, with next-day prices moving around $1.24-1.25 per mmBtu this week.
- With the prompt physical market also seeing deviations such as Waha spot prices trading negative again, futures prices saw only a minor downside and rebounded later in the week to $1.75 per mmBtu.
- A number of gas producers is increasing their stock of drilled but uncompleted (DUC) gas wells, with CNX announcing the deferral of 11 wells this year within the Marcellus Shale, following the lead of Chesapeake which expects deferred turn-in-lines to come in at around 30-40.
- Gas producers are pinning their hopes on a marked improvement in demand come 2025, buoyed by new LNG liquefaction capacity launching, with the December 2025 futures contract trading around $4.2 per mmBtu.
2. Teapots Are Struggling to Survive as Taxes and Demand Woes Hit
- Operating rates across private refineries in Shandong province – the so-called teapots – have fallen to the lowest since the COVID-19 lockdown period of early 2022, below 55%.
- China’s teapots have been geared to maximize diesel production, but Chinese manufacturing has been in contraction since September and weak housing activity has capped margins.
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Related Knowledge Center: ENERGY BASICS: hydrogen
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