Page 34 - Policy Economic Report - November 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 $2.2 per million British thermal
units (MMBtu) in October 2024. Concerns about supply disruptions ebbed as production
continued to return to normalcy in October, following several outages caused by the hurricane
season in the Gulf of Mexico during the two previous months. According to data from the US
Energy Information Administration (EIA), underground storage rose in October by 8.0%, m-o-m.
Prices were further pressured by US LNG export delays, which inflated domestic supplies. Henry
Hub prices were down by ~26%, y-o-y.

• Natural gas spot price at the Title Transfer Facility (TTF) in the Netherlands in Europe traded at an
average of $12.92 per MMBtu. The average Title Transfer Facility (TTF) price rose in October by
9.6%, m-o-m. According to data from Gas Infrastructure Europe, EU storage levels were at about
95% capacity as of 31 October. Prices rose on the back of higher storage withdrawals amid greater
demand. Withdrawals rose by 26.1%, m-o-m, in October, underscoring tightness in the market
ahead of winter season demand. Prices were further supported by geopolitical developments,
which continued to sustain price volatility. They were down by 11.3%, y-o-y.

• Japan Liquefied Natural Gas Import Price averaged at $12.91 per MMBtu for October 2024. There
is a change of -0.5% from last month and 2.3% 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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