Page 34 - Policy Economic Report - December 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Natural Gas Market

Natural Gas Price – Monthly Review

• Natural gas spot prices at the US Henry Hub benchmark averaged $2.12 per million British thermal
units (MMBtu) in November 2024. Henry Hub's natural gas prices experienced a consecutive
monthly decline in November, falling by ~4.0%, m-o-m. Prices rose earlier in the month on the
back of higher heating demand. However, the absence of an expected winter storm reduced
heating demand, therefore putting downward pressure on prices. Reports of robust storage levels
added more downward pressure on prices. According to data from the US Energy Information
Administration (EIA), weekly average underground storage rose in November by 5.7%, m-o-m,
and it is around 8% above the five-year average (2019–2023). Henry Hub prices were down by
~22.0%, y-o-y.

• Natural gas spot price at the Title Transfer Facility (TTF) in the Netherlands in Europe traded at an
average of $13.93 per MMBtu. The average Title Transfer Facility (TTF) price rose for a second
consecutive month in November, increasing by 7.8%, m-o-m. Prices advanced on the back of
renewed supply risk concerns amid geopolitical developments and higher demand for residential
heating, which pushed gas demand above average seasonal demand. It is worth noting that,
according to data from Gas Infrastructure Europe, EU storage levels were at about 85% of capacity
as of 30 November, ten percentage points below the previous month. Prices were down by 3.9%,
y-o-y.

• Japan Liquefied Natural Gas Import Price averaged at $12.49 per MMBtu for November 2024.
There is a change of -0.4% from last month and -1.8% from one year ago.

• The Union Cabinet has approved a new formula for pricing of natural gas and imposed cap or
ceiling price on the same. Natural gas produced from legacy or old fields, known as APM gas, will
now be indexed to crude oil prices. From April 1 2023, APM gas will be priced at 10% of the price
of basket of crude oil that India imports. The rate such arrived at however will be capped at US$
6.5 per MMBTU. The price such arrived at will also have a floor of US$4 per MMBTU.

• Further, in accordance with MoP&NG, Govt. of India, pricing freedom for gas being produced from
discoveries in Deepwater, Ultra Deepwater and High Pressure-High Temperature areas, the gas
price ceiling for the period 1st April, 2023 - 30th September, 2023 was notified as US$
12.12/MMBTU on Gross Calorific Value (GCV) basis as per notification dated 31st March, 2023.
Gas price ceiling was further revised for the period 1st October, 2023 – 31st March, 2024 was
notified as US$9.96/MMBTU on Gross Calorific Value (GCV) basis as per notification dated 30th
September 2023. Gas price ceiling was further revised for the period 1st April, 2024 – 30th
September, 2024 was notified as US$9.87/MMBTU on Gross Calorific Value (GCV) basis as per
notification dated 31st March 2024. For the period 1st October, 2024 – 31st March, 2025 Gas price
ceiling was further revised as US$10.16/MMBTU on Gross Calorific Value (GCV) basis as per
notification dated 30th September 2024.

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