Few members of the Wall Street Gang would have believed this possible a few months ago.
What they missed is that demand for gas is growing MUCH FASTER than EIA expected it to. This happens because EIA's forecasts are too heavily weighted on what has happened in the past.
NYMEX July contract for Natural Gas over $3.00
NYMEX July contract for Natural Gas over $3.00
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: NYMEX July contract for Natural Gas over $3.00
Raymond James' comment on natural gas"
"2018 should prove to be a positive year for natural gas demand as both exports to Mexico and outbound LNG tanker activity ramp up. On the supply side, more associated gas supply is expected. However, we believe an increasing domestic gas supply and growth in renewables that are increasingly becoming more cost competitive with gas will put further pressure on Henry Hub gas prices."
This is the first somewhat positive comment from RJ about ngas that I have seen.
The "BEARS" argue that the low storage level does not matter because we will have so much "deliverability" when winter heating season arrives that storage levels will not be important. My comment is "tell that to the utility companies that MUST maintain pressure in the residential gas lines or face criminal charges". Natural gas prices spike when the utilities get "nervous" about not having enough supply to meet winter. If 500+ Bcf below the 5-year average in mid-June doesn't make them nervous then I do not know what will.
In December, 2017 some utility companies were forced to pay over $50/MMBtu in the spot market to meet regional supply problems in the Northeast. They remember stuff like that.
"2018 should prove to be a positive year for natural gas demand as both exports to Mexico and outbound LNG tanker activity ramp up. On the supply side, more associated gas supply is expected. However, we believe an increasing domestic gas supply and growth in renewables that are increasingly becoming more cost competitive with gas will put further pressure on Henry Hub gas prices."
This is the first somewhat positive comment from RJ about ngas that I have seen.
The "BEARS" argue that the low storage level does not matter because we will have so much "deliverability" when winter heating season arrives that storage levels will not be important. My comment is "tell that to the utility companies that MUST maintain pressure in the residential gas lines or face criminal charges". Natural gas prices spike when the utilities get "nervous" about not having enough supply to meet winter. If 500+ Bcf below the 5-year average in mid-June doesn't make them nervous then I do not know what will.
In December, 2017 some utility companies were forced to pay over $50/MMBtu in the spot market to meet regional supply problems in the Northeast. They remember stuff like that.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group