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Executives from 144 oil and gas firms have revealed what they expect the Henry Hub natural gas price to be at the end of 2023 as part of the latest Dallas Fed Energy Survey.
When asked what they expected the commodity to be worth at the end of the year, the executives gave an average response of $3.14 per million British thermal units (MMBtu). The survey’s low forecast was $2 per MMBtu and its high forecast was $7 per MMBtu. The Henry Hub price during the collection period of the survey came in at $2.68 per MMBtu, the third quarter survey showed.
In the second quarter Dallas Fed Energy Survey, which was released back in June, executives from 149 oil and gas firms gave an average response of $2.97 per MMBtu. The low forecast in that survey was $1.80 per MMBtu, the high forecast was $6.00 per MMBtu, and the price of the commodity during the previous survey collection period was $2.03 per MMBtu, that survey outlined.
Executives from 143 oil and gas firms answered the question in the first survey, offering an average response of $3.43 per MMBtu. The low forecast in that survey came in at $1.75 per MMBtu, the high forecast was $12.50 per MMBtu, and the price during the survey collection period was $2.23 per MMBtu, the first quarter Dallas Fed Energy Survey highlighted.
“Natural gas prices are low, and it is a difficult environment,” one exploration and production firm said in a comment section of the latest Dallas Fed Energy Survey.
“The cost to drill wells has decreased but not enough. There needs to be a push to increase demand for natural gas,” it added.
“Low natural gas prices have slowed development of new projects,” another exploration and production company stated in the latest survey.
“The current natural gas price is not sustainable for exploration or development for small operators,” a separate exploration and production company noted in the survey.
In its latest short term energy outlook (STEO), which was released last month, the U.S. Energy Information Administration (EIA) projected that the Henry Hub spot price will average $2.95 per MMBtu in the fourth quarter of 2023. The STEO projects that the commodity will average $2.58 per MMBtu for the whole of 2023.
The EIA had the exact same Henry Hub spot price projections for the fourth quarter and full year in its previous STEO, which was released in August. Both the September and August STEOs placed the average Henry Hub spot price for 2022 at $6.42 per MMBtu.
In a report sent to Rigzone last week, Standard Chartered revealed that it projected that the NYMEX basis Henry Hub price would average $5.20 per MMBtu in the fourth quarter of this year. Standard Chartered’s overall NYMEX basis Henry Hub price projection for 2023 is $5.40 per MMBtu, that report showed.
In another report sent to Rigzone on September 20, analysts at BofA Global Research revealed that they were forecasting that Henry Hub gas would trade at $3.50 per MMBtu across the fourth quarter of 2023 and first quarter of 2024.
That report warned, however, that “a mild winter would put inventories on a path to hit new seasonal record highs by March and could lead to a repeat of sub $2 per MMBtu prices at times early next year as high-end of winter inventories reignite the possibility of hitting storage constraints next summer”.
In a market update sent to Rigzone on September 19, Rystad Analyst Andre Nikolai Nilsen highlighted that Henry Hub prices had kept within a range of $2.48 and $2.83 per MMBtu since June 20, “with occasional minor deviations”.
At the time of writing, the Henry Hub price is trading at $2.83 per MMBtu. The commodity has not closed above $3 per MMBtu since March this year.
To contact the author, email andreas.exarheas@rigzone.com
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