Chesapeake Energy’s Production Reduction Sparks Sharp Rebound in Natural Gas Prices

(New York = Yonhap Infomax) Reporter Youngsook Yoon = Natural gas prices rebounded sharply from the lowest level in three and a half years as Chesapeake Energy announced it would reduce future production.

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According to the Yonhap Infomax raw materials futures screen (6900) at 9:21 am on the 21st (US Eastern Time), the US March natural gas price was $1.773 per million BTU, up 12.5% ​​from the previous day.

The day before, it closed at the lowest level since June 26, 2020.

Natural gas prices have remained weak, falling about 55% since March of last year.

Despite today’s rebound, natural gas prices fell about 18% in February alone and 26% this year.

“Natural gas prices have been suffering due to a surge in domestic natural gas production, higher-than-average inventory levels and warmer-than-expected weather forecasts through the end of February,” Lu Ming Fang, analyst at Rystad Energy, told MarketWatch .

Chesapeake Energy said in its fourth-quarter earnings announcement the previous day that it was lowering the company’s capital spending guidance by about 20% to $1.25 billion to $1.35 billion.

These capital spending plans support natural gas production of 2.65 to 2.75 cubic feet per day (bcf/d) this year, the company said.

The company said it is producing the equivalent of 3.43 cubic feet per day in the fourth quarter of 2023, 98% of which is natural gas.

ING said Chesapeake’s capital plan has sparked a rebound in natural gas futures prices.

ysyoon@yna.co.kr

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This article was published on the Infomax financial information terminal at 23:44, two hours earlier.

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