Recent trends in the US gas market suggest that prices at Henry Hub (Henry Hub) may have declined somewhat.
The Zhitong Finance App learned that according to the opinions of Goldman Sachs analysts, recent trends in the US gas market indicate that the price of Henry Hub (Henry Hub) may have declined somewhat. Henry Hub is a gas pipeline located in Elathe, Louisiana, and is the official delivery location for New York Mercantile Exchange (NYMEX) futures contracts.
Analysts explained that although US gas production is slightly behind expectations, particularly in the Gulf region, a range of factors, including maintenance activities, oil well shutdowns, and lower production due to low investment, have affected market dynamics.
The Henry Hub cash price has expanded compared to the New York Mercantile Exchange spot contract and is currently 22 cents, compared to 12 cents earlier this month. This change is mainly due to increased supply in some regions, particularly production in Hinesville, North Louisiana, which has recovered from earlier maintenance.
On the demand side, seasonal weakness in the shoulder month and the continued shutdown of liquefied natural gas caused the market to weaken. Since mid-January, the interruption of Freeport LNG export facilities, including reported train restart issues, has had a significant impact on US gas prices, with a daily drop of 17 cents.
Analysts expect these factors to be short-lived. As summer approaches and demand for refrigeration increases, it is expected that the liquefied natural gas shutdown problem will be solved, the decline in Hinesville production may deepen, and the degree of market weakness may ease.
Looking ahead, concerns about US LNG maintenance remain, but are not expected to cause storage congestion in late summer. Analysts expect the continued shutdown of US liquefied natural gas export facilities will be completely resolved in May, and the average demand for LNG feedstocks for the rest of the summer is expected to rise to 12.8 billion cubic feet/day.
Although potential further liquefied natural gas maintenance is risky, the estimated storage level at the end of October is still expected to fall below 4.1 trillion cubic feet, according to current forecasts, even with a large number of facilities undergoing maintenance.
Overall, Goldman Sachs's analysis shows that as seasonal factors and operational issues in the LNG industry are addressed, market dynamics may be more balanced, and gas price trends over the next few months will also be affected.