Morgan Stanley raised its Henry Hub forecast from $3.75/MMBtu to $4.15/MMBtu for 2025 in its report. (Source: Shutterstock)
The U.S. Energy Information Administration (EIA) reported a massive 258 Bcf withdrawal from U.S. storage for the week ending Jan. 10 as frigid temps and growing demand continue to pull the natural gas market into bullish territory.
According to EIA data, the withdrawal was the largest in a year since Jan. 19, 2024, and within the top 10 largest withdrawals going back to 2010.
The EIA released the figures in its weekly report. Lower 48 states have 3.115 Tcf in storage, dropping about 3.4% from levels at the same time in 2024.
Large withdrawals from the U.S. storage usually happen in the winter months, typically in January. However, analysts pointed to the unusually cold temperatures, a growing LNG sector and lower production for the big drawdown.
Morgan Stanley noted production began at Corpus Christi LNG Stage III at the end of December, while Venture Global’s Plaquemines, which shipped its first cargo on Dec. 26, is now taking in 1 Bcf/d of natural gas ahead of original forecasts.
“LNG feed gas has averaged about 15 Bcf/d so far in January, a new monthly record for the U.S.,” Morgan Stanley analysts wrote in an analysis entitled “U.S. Natural Gas: Winter Wonderland” to describe the positive factors affecting natural gas supply.
U.S. dry natural gas production, meanwhile, averaged 102.5 Bcf/d so far in January, about 1.5 Bcf/d lower than December’s average.
Both events occurred while the country was experiencing its coldest January in a decade, according to the National Weather Service.
By March, Morgan Stanley forecasts natural gas in storage will fall to 1.55 Tcf, about 17% below the EIA’s five-year storage average. U.S. natural gas storage levels have not been below the five-year average since the spring of 2023.
The weather, production and demand factors have pushed natural gas to its highest price since December 2022. Henry Hub front-month futures prices hit $4.31/MMBtu during trading on Jan. 16, the first time the price had spent more than one day above $4/MMBtu since 2022.
Morgan Stanley raised its Henry Hub forecast from $3.75/MMBtu to $4.15/MMBtu for 2025 in its report.
Recommended Reading
SLB’s Big Boost from Digital, Offsetting Flat Trends in Oil, E&P
2025-01-17 - SLB’s digital revenue grew 20% in 2024 as customers continue to adopt the company's digital products, artificial intelligence and cloud computing.
AI-Shale Synergy: Experts Detail Transformational Ops Improvements
2025-01-17 - An abundance of data enables automation that saves time, cuts waste, speeds decision-making and sweetens the bottom line. Of course, there are challenges.
Artificial Lift Firm Flowco Prices IPO Above Guidance at $427MM
2025-01-15 - Flowco Holdings priced its IPO at $24 per share, above its original guidance. The oilfield services firm will begin trading on the New York Stock Exchange on Jan. 16.
Pioneer Energy’s Tech Offers More Pad Throughput, Fewer Emissions
2025-01-14 - Pioneer Energy’s Emission Control Treater technology reduces emissions and can boost a well’s crude yield by 5% to10%, executives say.
ZENRG Capitalizing on New Investments, Tech to Reduce Emissions
2025-01-07 - ZENRG Services recently secured funding from Chevron, BP Energy Partners and EIC Rose Rock to support its expansion of compression technology that keeps methane from being vented or flared.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.