Executives from 144 oil and gas companies have revealed what they expect Henry Hub natural gas prices to be at the end of 2023 as part of the Dallas Fed’s latest energy survey.
When asked what they expected the commodity to be worth by the end of the year, executives gave an average answer of $3.14 per million British thermal units (MMBtu). The poll’s low forecast was $2 per MMBtu and its high forecast was $7 per MMBtu. Henry Hub’s price during the survey’s collection period was $2.68 per MMBtu, the third-quarter survey showed.
In the second quarter of the Dallas Fed Energy Survey, which was released in June, executives at 149 oil and gas companies gave an average response of $2.97 per MMBtu. The low forecast for this survey was $1.80 per MMBtu, the high forecast was $6.00 per MMBtu, and the commodity price during the previous survey’s collection period was 2.03 dollars per MMBtu, according to the survey.
Executives from 143 oil and gas companies answered the question in the first survey, offering an average answer of $3.43 per MMBtu. The low forecast for this survey was $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 , highlighted the first quarter Dallas Fed Energy Survey.
“Natural gas prices are low and it’s a challenging environment,” one exploration and production company said in a comments section of the Dallas Fed’s latest energy survey.
“The cost of drilling wells has decreased but not enough. It must be pushed to increase demand for natural gas,” he added.
“Low natural gas prices have slowed the development of new projects,” another E&P firm said in the latest survey.
“The current price of natural gas is not sustainable for exploration or development for small operators,” one independent exploration and production company noted in the survey.
In its latest Short-Term Energy Outlook (STEO), which was released last month, the US Energy Information Administration (EIA) projected that the Henry Hub spot price would average 2, $95 per MMBtu in the fourth quarter of 2023. STEO expects the commodity to average $2.58 per MMBtu throughout 2023.
The EIA had exactly the 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 the NYMEX-based Henry Hub price to average $5.20 per MMBtu in the fourth quarter of this year. Standard Chartered’s NYMEX-based Henry Hub price projection for 2023 is $5.40 per MMBtu, according to the report.
In another report sent to Rigzone on September 20, analysts at BofA Global Research revealed that they forecast Henry Hub gas to trade at $3.50 per MMBtu during the fourth quarter of 2023 and the first quarter of 2024.
That report warned, however, that “a mild winter would put inventories on track to hit new seasonal record highs in March and could lead to a repeat of prices below $2 per MMBtu at times early next year, already that high-end winter inventories reset.the possibility of reaching storage constraints next summer”.
In a market update sent to Rigzone on September 19, Rystad analyst Andre Nikolai Nilsen noted that Henry Hub prices had remained 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, please send an email andreas.exarcheas@rigzone.com
