BAKU, Azerbaijan, April 11. According to BMI, a Fitch Solutions company, the forecast for the 2024 Henry Hub front month natural gas price has been adjusted to USD 2.8 per million British thermal units (mmBtu), down from the initial projection of USD 3.4 mmBtu, reflecting the significant price declines observed in Q1 2024, Trend reports via BMI.
This adjustment implies that the 2024 average Henry Hub price will settle above the current lows and only marginally higher than the levels seen in 2023.
Despite the anticipation of continued weakness in prices in the near term, BMI expects a rebound in front month prices throughout the remainder of 2024. This recovery is expected to be driven by increased demand from the power, industrial, and LNG sectors, coupled with supply constraints that will tighten the domestic gas market.
During Q1 2024, Henry Hub front month prices exhibited heightened volatility, surging to over USD 3.3 mmBtu in mid-January due to supply disruptions and heightened demand triggered by a cold spell in major gas-producing regions of the US. However, this trend abruptly reversed as temperatures moderated and the weather forecast for the remaining winter months indicated milder conditions.
Additionally, healthy storage levels, sustained growth in natural gas production, and temporary disruptions in LNG production at Freeport LNG contributed to the decline in Henry Hub prices to their lowest levels since June 2020. Prices plummeted to USD 1.58 mmBtu before experiencing a modest recovery, averaging USD 1.75 mmBtu in March 2024.
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