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.

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.

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.

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