https://seekingalpha.com/article/425422 ... ouble-2019
https://seekingalpha.com/article/425423 ... as-holding
bullish take on natgas price
Re: bullish take on natgas price
Good articles that all of you should read.
Keep in mind:
1. EIA has a massive budget, but their production forecasts are no better than any of us can come up with. They are notorious at over-estimating supply. I believe they want to keep energy prices low in the U.S., so they paint a picture to support that. They also under-estimate demand growth.
2. The U.S. has massive natural gas reserves, but "reserves in the ground and production capacity are two totally different things". A lot of the best leasehold in Appalachia (Marcellus & Utica Shales) is now held by production. AR, GPOR, RRC and SWN are not going to jack up production at today's gas price AND they are under no pressure to do so.
3. The global market for natural gas is growing at least twice as fast as the global market for oil is growing. Natural gas is the cleanest and cheapest form of primary energy on Earth.
4. Mother Nature has a lot to do with the demand for gas in each region. A hot summer in the U.S. will cause demand for gas to spike since each year we replace more coal fired power plants with gas fired power plants.
5. Resolution of the "Tariff War" with China could significantly increase demand for U.S. gas.
Keep in mind:
1. EIA has a massive budget, but their production forecasts are no better than any of us can come up with. They are notorious at over-estimating supply. I believe they want to keep energy prices low in the U.S., so they paint a picture to support that. They also under-estimate demand growth.
2. The U.S. has massive natural gas reserves, but "reserves in the ground and production capacity are two totally different things". A lot of the best leasehold in Appalachia (Marcellus & Utica Shales) is now held by production. AR, GPOR, RRC and SWN are not going to jack up production at today's gas price AND they are under no pressure to do so.
3. The global market for natural gas is growing at least twice as fast as the global market for oil is growing. Natural gas is the cleanest and cheapest form of primary energy on Earth.
4. Mother Nature has a lot to do with the demand for gas in each region. A hot summer in the U.S. will cause demand for gas to spike since each year we replace more coal fired power plants with gas fired power plants.
5. Resolution of the "Tariff War" with China could significantly increase demand for U.S. gas.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group