Natural Gas Prices - Likely to stay high thru 2022

[dan_s]

As I have mentioned many times in my podcasts, I believe that if LNG exports from the U.S. to Europe and Asia remain high, so will U.S. natural gas prices.

From Raymond James new report:
Spotlight on U.S. LNG exports.
"U.S. LNG exports remain the most interesting demand variable in our model. We continue to forecast above EIA U.S. LNG exports for the balance of 2021 and into 2022. Recall, even as we have been more aggressive than the EIA this year, the market has consistently beaten even our projections. While this could change slightly as the actual data comes through from late summer/early fall hurricane disruptions, we project U.S. LNG exports running full out until international prices substantially retreat — and the strip doesn’t suggest that happens anytime over the next few years. As such, we expect LNG to tighten the domestic market by another ~2 Bcf/d in 2022 — further extending all-time highs."

Raymond James forecast for Henry Hub gas prices in 2022 are now:
$5.00 in Q1
$4.25 in Q2
$4.25 in Q3
$4.50 in Q4
for full-year average of $4.50

A cold start to winter could significantly raise the gas price in Q1, but even with a mild winter I think gas prices will remain over $4.00. I have decided to raise the oil and gas prices in my forecast models for 2022 to $80/bbl and $4.25/mcf. I also think propane prices could go over WTI prices during the winter.