"We are optimistic that together we can make real progress. When the world comes to COP29 in Azerbaijan, we want everyone to focus on our moral duty and collective interest to confront the climate crisis. COP is a party-driven process, and we need all hands-on deck as billions of people are counting on you to meet these responsibilities and seize these opportunities.”
H.E. Mukhtar Babayev
Minister of Ecology and Natural Resources, Republic of Azerbaijan
COP29 President-Designate
Azi Feifel
COO PROSPECT RESOURCES
Trends in the Energy Market
SEPTEMBER 2024
Current Market News
Prompt-month NYMEX settled at $2.61 / MMBtu, up $.18 / MMBtu, on Monday, September 23. Natural gas strip prices for 2025-2029 are:$3.32, $3.59, $3.58, $3.48, and $3.35 per MMBtu respectively.
Natural gas production has been done modestly. Production month-to-date has averaged 100.7 Bcf per day versus 102.4 Bcf per day for the same period last year.
Demand for electric-power generation is a primary driver for natural gas price variation. Demand for electric power generation is strong, and has averaged 41.1 Bcf per day versus 40.8 Bcf per day for the same period last year.
Nationally the picture is largely "warmer than normal," over the next two weeks. Soon-to-be Hurricane Helene will make Florida landfall on Thursday. This storm will bring lots of much needed moisture to the Southeast and lower Midwest. The West will be warmer than normal though October.
As of the 9/13 EIA storage report, natural gas inventories continue to diminish slightly; but are still 6.0% higher than last year and 8.6% higher than the 5-year average.
WTI futures have seen a lot of movement, up and down, prompt-month crude $70.37 per barrel, down $.63 on Monday, September 23. As of this writing on 9/25, crude has fallen and is trading at $68-$69 per barrel for the foreseeable future.
Despite near-term softness, the geopolitical tensions remain in this market providing the potential for upside and "Bullish" outlook in crude oil.
The economy is in neutral. The Fed cut interest rates for the 1st time since 2020 fifty basis points last week. U.S. unemployment is at 4.2%. The stock market is up but the Consumer Confidex Index has slid dramatically. US existing home sales have fallen.
Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.1 million has changed little. These are higher than last year, when the jobless rate was 3.8 percent, and the number of unemployed people was 6.3 million.
Power forward curves through 2028 have turned up after trending down for a number of months. Wind and solar additions have added significant reliability to ERCOT and reduced volatility during some challenging weather periods.
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Demand Response (DR) is an energy curtailment program offered by U.S. grid operators.
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Against a backdrop of policies aimed at reducing greenhouse gas emissions, operators of a handful of natural gas plants have taken early steps to integrate hydrogen into their fuel streams. Hydrogen alone does not create CO2 emissions when combusted.
The EIA recently implemented a new model for forecasting crude oil and natural gas production from the U.S. Federal Offshore Gulf of Mexico (GOM) in the Short-Term Energy Outlook (STEO). In their latest outlook, they forecast that GOM production will remain relatively flat with new fields offsetting the natural production declines from existing fields.
Financial results for 36 publicly traded U.S. oil exploration and production (E&P) companies show that cash from operations in the first quarter of 2024 has decreased in real terms from the first quarter of 2023 due to lower natural gas prices.
In the first six months of 2024, U.S. net natural gas exports (exports minus imports) averaged 12.6 billion cubic feet per day (Bcf/d), 1% (0.1 Bcf/d) more than the same period last year and 2% (0.3 Bcf/d) less than in 2023, according to the Natural Gas Monthly. Since 2019, increases in liquefied natural gas (LNG) exports and exports by pipeline to Mexico have led the growth in U.S. natural gas exports. The United States has exported more natural gas than it imports since 2017.
Canada and Mexico are rushing to fill the natural gas vacuum left by the United States’ ongoing moratorium on new liquefied natural gas (LNG) export permits.
