4 critical moments for North American oil and gas trading
To stay ahead of the energy commodities market in North America in 2024, you had to be on top of these events as they happened
In an uncertain world, global commodities markets are increasingly sensitive to a wide range of factors that can impact supply, demand and prices. As we come to the end of an eventful year for North American oil and gas, we highlight some of the ways Wood Mackenzie’s real-time data and analytics have helped our clients stay ahead of events that shaped the market in 2024.
1. January 2024: New WoodMac model forecasts US natural gas freeze-offs
Freeze-offs can be a serious problem at all stages of the gas supply chain, from the production wellhead through to the last point in the customer delivery system. Whether the gas is a byproduct from a crude oil well, or ‘dry gas’ from a gas-only well, the potential for water or hydrates to freeze and block the flow is a constant threat as temperatures fall. Our research shows that new natural gas production added over the past decade is more vulnerable to freeze-offs than legacy wells, making the forecasting of these events more important than ever.
As the cold weather surge hit at the beginning of the year, we launched an all-new freeze-off forecasting model to accurately forecast the impact by region of low temperatures two weeks ahead. During the extreme weather, freeze-offs actualised close to our ‘most likely’ scenario, underlining the accuracy of the new forecasting approach.
2. February 2024: WoodMac flyover shows Matterhorn Express Pipeline progress
The 580-mile Matterhorn Express Pipeline (MXP) is designed to provide an added 2.5 billion cubic feet per day (bcfd) of takeaway capacity out of the Permian basin to Katy, near Houston, Texas. In mid-February, we chartered an aircraft to overfly the route of the pipeline, which was still under construction.
With the benefit of over 3,000 photographs taken on the reconnaissance flight we were able to confirm significant progress both on the pipeline itself and on its associated compressor stations. Subscribers to our Natural Gas Infrastructure Intelligence product were able to access the photos and draw their own conclusions via our NatGas Portal.
Initial flows along the MXP followed in September 2024. While the pipeline won’t initially unlock new production, it will provide much-needed additional capacity to address constraints on sending gas eastwards from the Permian and out of the region. That should strengthen cash prices for gas at the central Waha Hub in Pecos County, Texas – particularly during disruption due to events such as pipeline outages and maintenance that can drive Waha cash prices below zero.
3. April 2024: WoodMac crude storage levels data shows TMX oil pipeline nearing completion
The Trans Mountain Expansion (TMX) project involves the construction of an additional pipeline roughly parallel to the existing one between Edmonton and Burnaby in Vancouver, Canada. In April we registered a sharp drop in crude inventories at the storage hub in Edmonton where the pipeline originates. This indicated that significant system line fill had started – the final pre-operation step before the pipeline was ready for commercial shipments.
TMX went on to deliver its first barrels of oil on 20 May. By subscribing to our North American Crude Markets Service, WoodMac clients were able to stay ahead of the market impact of TMX going into commercial operation. They also enjoyed access to our in-depth views on how the pipeline will reconfigure trade flows across the North American crude value chain.
4. August 2024: Wood Mac Production by Producer models capture Marcellus gas curtailment
On 2 August 2024, Coterra Energy announced it had decided to cut 325 million cubic feet per day (mmcfd) of gross production (275 mmcfd net) from its Marcellus shale gas play in Pennsylvania. The firm’s decision, made in response to low market prices, was one of a string of similar decisions made that quarter by companies including Chesapeake Energy, EQT Corporation and National Fuel Gas.
Clients of WoodMac’s Equity Production Insight Service, which uses proprietary data and analytics to monitor daily production levels for more than 30 oil and gas exploration firms, were informed of the curtailment almost as it happened. Our data showed estimated net production for Coterra down around 270 mmcfd from the first of the month, in line with the figure given in the company’s announcement the following day.
By :Jim Mitchell , Woodmac / 06 December 2024