COM - Natural Gas Balance Flips To A Deficit As EQT Joins The 'Production Cut Gang'
2024-03-06 11:09:21 ET
Summary
- Low prices are curing low prices.
- Chesapeake Energy and EQT have both announced significant production cuts in response to low gas prices.
- At ~101 Bcf/d, the U.S. natural gas market has flipped into a deficit.
- However, the production cut came out of necessity as storage is expected to exit this winter +550 Bcf vs 5-year average.
- The dilemma for the market going forward will be dependent on how production reacts to recovering prices. It will be self-defeating if prices rally too quick prompting producers to increase production again.
Natural gas prices have staged a remarkable recovery since bottoming around ~$1.5/MMBtu. Chesapeake Energy (CHK) was the first U.S. gas producer to announce a sizable production cut (~0.73 Bcf/d), and just yesterday, EQT Corporation (EQT) joined the gang with a production cut of ~1 Bcf/d for March....
Natural Gas Balance Flips To A Deficit As EQT Joins The 'Production Cut Gang'