Mild winter could push natural-gas prices below $2 per million BTUs ... - Reuters
Mild winter could push natural-gas prices below $2 per million BTUs in first quarter of 2024, Bank of America says | Reuters
Mild winter could push natural-gas prices below $2 per million BTUs in first quarter of 2024, Bank of America says
Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford/File Photo Acquire Licensing Rights
Sept 20 (Reuters) - Bank of America on Tuesday said that while the heatwave in Texas almost halved the U.S. natural gas storage surplus, a mild winter could still drive stocks to records and push prices below $2 per million British thermal units (mmBtu) in the first quarter of 2024.
The bank said the storage trajectory posed downside risks to its $4 per mmBtu projection for 2024.
U.S. production was on track to rise from a record 98.1 billion cubic feet per day (bcfd) in 2022 to 102.7 bcfd in 2023 and 104.9 bcfd in 2024, according to the EIA.
Soaring temperatures pushed power demand to record levels multiple times in Texas this summer, prompting small spikes in natural gas prices in August, offsetting pressure from rising output.
Extreme heat boosts the amount of gas burned to produce power for cooling, especially in Texas, which gets most of its electricity from gas-fired plants.
On Tuesday, US natural gas futures settled at a near six-week high of $2.848 per mmBtu on a decline in daily output and a rise in supply to the country's LNG export facilities.
However, gas inventories were still expected to finish the 2023-24 winter season near five-year highs, at 1.77 trillion cubic feet, analysts at the bank said in a note.
"If realized, this inventory path may cause Henry Hub gas to trade below our forecast of $3.50/mmbtu (4Q23/1Q24) and below the current forward curve," the bank said.
Such a situation could also reignite the possibility of hitting storage constraints next year, it added.
Reporting by Anushree Mukherjee in Bengaluru; Editing by Alexandra Hudson
Our Standards: The Thomson Reuters Trust Principles.
Read Next
Commodities Slovakia, Ukraine agree grain trade system to replace ban -Slovak ministry
Slovakia and Ukraine's farm ministers have agreed to set up a licensing system for trading in grains, which would allow a ban on imports of four Ukrainian commodities to Slovakia to be lifted once the system is set up, the Slovak Agriculture Ministry said on Thursday.
Ship with Ukraine grain back in Turkey under "humanitarian corridor"
The cargo ship "Resilient Africa" arrived off Turkey's Bosphorus Strait on Thursday, the first vessel loaded with grain from Ukraine to sail in and out of the Black Sea using a temporary corridor.