Oil, Gas Execs Predict Henry Hub Natural Gas Price

Oil, Gas Execs Predict Henry Hub Natural Gas Price
Executives from oil and gas firms have revealed where they expect the Henry Hub natural gas price to be at various points in the future as part of the latest Dallas Fed Energy Survey.
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Executives from oil and gas firms have revealed where they expect the Henry Hub natural gas price to be at various points in the future as part of the third quarter Dallas Fed Energy Survey.

The average response executives from 131 oil and gas firms gave when asked what they expect the Henry Hub natural gas price to be at the end of 2024 was $2.62 per million British thermal units (MMBtu), the survey highlighted. The low forecast was $1.50 per MMBtu, the high forecast was $4.25 per MMBtu, and the Henry Hub spot price during the survey averaged $2.23 per MMBtu, the survey pointed out.

In the previous Dallas Fed Energy Survey, which was released in the second quarter, the average response executives from 133 oil and gas firms gave when asked the same question was $3.01 per MMBtu. The low forecast in that survey came in at $1.85 per MMBtu, the high forecast was $4.80 per MMBtu, and the Henry Hub spot price during the survey averaged $2.61 per MMBtu, that survey outlined.

The latest Dallas Fed Energy Survey also asked participants where they expect Henry Hub natural prices to be in six months, one year, two years, and five years. Executives from 112 oil and gas firms answered this question and gave a mean response of $2.57 per MMBtu for the six month mark, $2.85 per MMBtu for the year mark, $3.24 per MMBtu for the two year mark, and $3.89 per MMBtu for the five year mark, the survey showed.

Executives from 116 oil and gas firms answered this question in the previous Dallas Fed Energy Survey. They gave a mean response of $2.93 per MMBtu for the six month mark, $3.15 per MMBtu for the year mark, $3.58 per MMBtu for the two year mark, and $4.28 per MMBtu for the five year mark, that survey highlighted.

The gas price was highlighted several times in a ‘comments’ section of the latest Dallas Fed Energy Survey, which the survey outlined showed comments from respondents’ completed surveys that had been edited for publication.

“Natural gas production in the Permian Basin is priced well below the futures market,” one exploration and production firm said, the survey showed.

“Several of the past months I have received nothing or a negative adjustment to revenue for natural gas. In June, one operator paid $0.09 per million cubic feet, which is above $0, but accrues little to my revenue. I believe this situation will persist for months if not years,” it added.

Another exploration and production firm was quoted in the survey as saying, “we are seeing natural gas prices affect drilling rig utilization in the East Texas Basin”.

“The Eastern Haynesville drilling rig utilization is dropping off, and drilling rig utilization in the Western Haynesville/Bossier Sands play is increasing due to higher production rates being found there,” it added.

A separate exploration and production firm was quoted as stating in the survey, “turbulent commodity pricing markets, specifically WTI (West Texas Intermediate) crude oil and Henry Hub natural gas, do not allow for confident future performance projections when it comes to net income”.

A research note sent to Rigzone by the JPM Commodities Research team on Monday showed that J.P. Morgan is forecasting that the U.S. natural gas Henry Hub price will average $2.33 per MMBtu in 2024 and $3.70 per MMBtu in 2025.

A report sent to Rigzone late Tuesday by Standard Chartered Bank Head of Commodities Research Paul Horsnell showed that the company expects the NYMEX basis Henry Hub nearby future price to average $2.17 per MMBtu in the third quarter of this year, $2.70 per MMBtu in the fourth quarter, and $3.25 per MMBtu overall in 2025.

In a BMI report sent to Rigzone by the Fitch Group on September 20, BMI projected that the natural gas Henry Hub front month price will average $2.40 per MMBtu in 2024 and $3.40 per MMBtu in 2025.

To contact the author, email andreas.exarheas@rigzone.com


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Andreas Exarheas
Editor | Rigzone