Henry Hub Hits 13 Year High
Henry Hub prices reached a 13 year high this week, Rystad Energy’s senior analyst Nikoline Bromander highlighted in a note sent to Rigzone on Wednesday.
The price of the commodity closed at $7.8 per MMBTU on Monday due to a colder than normal April, increasing demand, in addition with some local supply constraints and the continuous high regasification levels, Bromander outlined in the note.
“Supply output has been down for the last week in New Mexico pipelines from the Permian and in the Appalachia region, keeping markets nervous [about] longer-term storage,” Bromander said in the note.
“Storage levels are 18 percent below the five-year average, still within the five-year range, however unsettling for market participants,” the analyst added.
Bromander highlighted that prices dropped on Tuesday to $7.2 per MMBTU on the back of forecasts of warmer weather. On Wednesday, the commodity closed at $6.9 per MMBTU, and at the time of writing, the commodity is trading at $6.8 per MMBTU.
Around this time last year, the Henry Hub price was near the $2.7 per MMBTU mark. The price rose above $6.3 per MMBTU by October 2021, before dropping to under $3.7 per MMBTU by December 2021. Prices spiked above $6.2 per MMBTU in January this year, before dropping under $4 per MMBTU in February. Since then, prices have risen sharply, peaking on April 18.
Back on April 12, Rystad Energy’s senior analyst Vinicius Romano highlighted that the Henry Hub was at a 13 year high, topping $6.7 per MMBTU that morning, “as large swathes of the northern U.S. and Southern Canada experience a prolonged winter”.
On the same day, Fitch Solutions Country Risk & Industry Research revealed in a report that it had raised its 2022 Henry Hub price forecast to $4.9 per MMBTU. In the report, analysts at Fitch Solutions Country Risk & Industry Research outlined that they increased their previous forecast of $4 per MMBTU as they expected continued strong growth in U.S. LNG exports against strong domestic consumption for electricity for summer cooling.
To contact the author, email andreas.exarheas@rigzone.com