Sub-$2.00 U.S. natural gas prices projected in fall 2012 will lead the market to extremes.
Gas Tank Full: Henry Hub Will Re-Test Price Floor projects substantial U.S. natural gas production curtailments could be required by the end of the 2012 injection season as storage inventories approach operational capacity. The 2012 injection season began with storage inventory levels at 2,479, or 60% above the five-year average. Platts' Market Alert expects that as demand declines and storage continues to rapidly fill, during the fall shoulder season monthly average Henry Hub natural gas cash prices will drop to $1.00 handles.
While substantial year-on-year demand growth may decrease the rate of injections this summer, Platts reports U.S. storage fields likely will approach operational capacity and dry gas production could face substantial curtailments by the end of summer.
Platts' Market Alert, Gas Tank Full: Henry Hub Will Re-Test Price Floor, evaluates the natural gas fundamentals that will effect the 2012 storage surplus including injection rates, power demand and production curtailments.