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US spot gas price ends 2019 deflated

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Essential Energy Insights - September 17, 2020

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US spot gas price ends 2019 deflated

Spot natural gas prices across the country in December 2019 were slashed by over one-third to nearly half versus prior-year levels, as robust shale gas production accompanied subdued weather-related demand.

The Midcontinent continued to lead the downtrend as the regional average spot gas price fell 47.6% year over year to $1.999/MMBtu in December 2019. Elsewhere in the country, losses ranging from 35.3% to 46.5% over the same period left day-ahead gas price indexes between $2/MMBtu and $3/MMBtu.

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Year-over-year percentage declines over 40% were prevalent at Midcontinent trading locations, reflecting a drop in spot gas price indexes from the high $3s per MMBtu in December 2018 to the low $2s per MMBtu in December 2019.

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Production trends fueled downside momentum, as the latest Drilling Productivity Report from the U.S. Energy Information Administration showed shale gas output reaching 85.52 Bcf/d in December 2019 and 85.60 Bcf/d in January 2020.

Gas home heating customer-weighted heating degree days, a proxy for space heating demand for natural gas, for the four-week period ended Dec. 28, 2019, were up a modest 0.4% from the comparable year-ago period for the U.S. as a whole, according to data from the National Oceanic and Atmospheric Administration. Heating degree days were flat versus last year for the East North Central region and up 2.2% over the same period for the West North Central region.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities pages.