Just two years ago, natural gas prices hit historic highs in Oklahoma, leading to extensive long-term payments for customers of major utilities.
This year is a different story as natural gas supplies have fallen, according to the U.S. Energy Department’s weekly inventory release. The past week was the sixth consecutive loss week over week reported the U.S. Energy Information Administration. The losses are due to high production and mild weather this winter.
As a result, commodity trading has been lower year to date and at one time, even dropped below the $2 threshold for the first time since 2020. The EIA indicated stockpiles in underground storage in the lower 48 states dropped 55 billion cubic feet for the week that ended Dec. 8.
Gas futures for January delivery hit a six-month low early last week and ended Friday’s trading at $2.49 on the New York Mercantile Exchange. As we’ve pointed out, the U.S. crude oil production is at record pace with fewer rigs. And the natural gas industry is also facing a decline in the number of gas-drilling rigs active across the nation. According to Baker Hughes, the natural gas rig total is down 23% from a year ago.