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NATURAL GAS: BAKER HUGHES RIG COUNT FOR THE LAST FIVE YEARS

Natural gas rig counts

Keep an eye on the Natural Gas rig counts. We have dropped from 166 rigs a year ago down to 114 this last week. This is the lowest we have been since just before the Russian invasion of Ukraine.

Last winter, we got lucky as we had a very mild winter. If we have a typical or colder-than-average winter, those idle wells will take a bit to spin up again.

WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK

US weather map

The intense heat we have seen in the South and up through the Plains States will ease up a bit in the next 10-16 days, with more normal temperatures forecast. This cooler forecast may account for the almost thirty-cent drop in prompt month pricing in the last ten days.

EIA WEEKLY NATURAL GAS STORAGE

EIA WEEKLY NATURAL GAS STORAGE REPORT

• A year ago, pricing for Oct-Nov was close to $3.00 higher than now. Many people may have entered short-term gas agreements at te height of the high gas prices, which are ending soon. Review current market trends and don’t get caught up on a supplier’s holdover rate.

• Due to high demand, we have had weak injections this summer. We were 25.3% above last year’s storage level a month ago and 14.6% over the five-year average. We are 17.7% above last year and 7.6% above the five-year. If we get below the five-year average, gas prices will rise sharply.

AEP ADHUB ELECTRICITY VS. HENRY HUB NATURAL GAS.

AEP ADHUB ELECTRICITY VS. HENRY HUB NATURAL GAS.

NYMEX 12-MONTH ROLLING STRIP NOV-OCT

NYMEX 12-MONTH ROLLING STRIP NOV-OCT

ALL ABOUT THE NYMEX TWELVE-MONTH STRIP 

  • The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
  • A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
  • The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
  • The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
  • The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
  • The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.