U.S. natural gas producers seek to balance production cuts, demand rebound
(Reuters) - The longer natural gas prices stay lower in 2024 and drilling and related activity pulled back, the market could overshoot to both the downside and upside next year as it seeks to find an equilibrium, EQT's financial head Jeremy Knop said.
U.S. natural gas futures ended 2023 with the biggest percentage decline since 2006 due to record production, ample inventories and a mild winter.
There is the risk of over-hedging causing the company to miss out on higher prices that would come when demand picks up, Knop told the Goldman Sachs Energy, Clean Tech and Utilities conference in Miami on Thursday.
Natural gas prices fell sharply in 2023 from around $10 per million British thermal units (mmBtu) scaled in 2022 following the disruptions caused by the Russia-Ukraine war.
Chesapeake Energy CFO Mohit Singh said at the conference that production from the Haynesville basin in Louisiana, Texas and Arkansas could drop in the first quarter of 2024 as production rolls over with a rig count decline.
The company aims to increase the number of its LNG offtake agreements after signing deals with Gunvor and Vitol. It has targeted to raise such sale agreements to up to 20% of total production from 6% currently.
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