NGI's 1Q2024 Natural Gas Supply and Demand Takeaways - Natural Gas Intelligence

NGI’s 1Q2024 Natural Gas Supply and Demand Takeaways

Expectations for North American upstream natural gas capital expenditures in 2024 continue to show a year/year decline in the low- to mid-single digits, with subdued rig counts persisting throughout the year. Eventually, those rigs would need to resume work to account for the in-service of more Lower 48 LNG export capacity next year, and possibly to gear up for the rapid growth in data centers – although it is uncertain as to what that opportunity for incremental gas demand may be.

NGI reviewed some of the first quarter of 2024 earnings calls for players in the major North American oil and natural gas production areas in order to gauge future supply and demand trends. NGI’s Patrick Rau, senior vice president for Research & Analysis, also provided a rundown of the top ten themes of 1Q2024 in the latest episode of Hub & Flow.

Baker Hughes Co. (BKR) – Baker Hughes has proclaimed this to be “The Age of Gas.” That’s more of a long-term view, and maybe not quite as apropos a description for 2024, at least not in North America (NA). Both Baker Hughes and SLB Ltd. continue to expect NA activity and spending to be down to the low- to mid-single digits for the rest of this year, primarily because of lower natural gas prices. Thus far in 2024, Lower 48 rigs have fallen to 600 from 622, per Baker Hughes. Even with the recent price rally – which has seen NGI’s daily Henry Hub spot market price index increase from a low of $1.240/MMBtu on March 13 to $2.635 June 3 – rigs are down by six this month.