The EIA has a multi $Billion budget, but I told you about this six weeks ago.
https://www.eia.gov/todayinenergy/detail.php?id=37272
"EIA projects that spot natural gas prices at the Henry Hub benchmark will average $2.99/million British thermal units (MMBtu) in 2018, virtually identical to 2017. In the STEO, annual average Henry Hub natural gas prices are expected to increase slightly to $3.12/MMBtu in 2019." - This is SIGNIFICANTLY HIGHER gas price for 2019 than EIA was forecasting just a few months ago.
Natural gas storage
Natural gas storage
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural gas storage
"The gas output surge has given markets comfort that wellhead supply may be adequate to compensate for the storage deficit during the coming winter. The problem with that logic is that gross gas supply—production minus exports—is not very comforting. LNG (liquefied natural gas) exports by tanker and pipeline exports to Mexico and Canada have been steadily increasing. Exports reached 3.25 bcf/d in September and are projected to increase to almost 9.5 bcf/d by November 2019. The result is that despite growing production, gross gas supply may have already peaked and is on track to decline going into winter."
Art Berman, October 15, 2018
Art Berman, October 15, 2018
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural gas storage
Art's Conclusion:
"It is unclear why markets are making what seems like such a risky bet on supply when history suggests a clearly negative outcome for price. Perhaps the impact of Winter 2017-2018 gas consumption has not been fully appreciated. November 2017 through April 2018 gas use was 16.5 tcf or 91.1 bcfd.
That exceeds the previous Winter 2013-2014 record by 0.8 tcf or 4.3 bcf/d. During that winter, weekly average Henry Hub prices reached $6/mmBtu.
January 2018 gas consumption was a remarkable 107 bcf/d!"
"It is unlikely that the U.S. will have an overall gas shortage this winter, but it is probable that prices will move higher as inventories are consistently drawn down. A normal winter will lead to short-term price spikes in local markets similar to what occurred last winter. History suggests that prices will almost certainly reach $4.00 to $4.25 weekly averages during the coming winter, and that much higher prices are possible."
"Americans have considerable faith in the wisdom of markets. It is worth noting that what markets do best is to force efficiency. That sometimes comes only after they occasionally get things wrong."
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MY TAKE: The first colder than normal week in December will take the January NYMEX contract over $4.00. Two colder than normal weeks in December will take it to $5.00. My prediction is that gas in storage will dip below 2,750 Bcf by December 31st. That will cause MAJOR CONCERNS among the utility companies serving the big cities. A bidding war for gas supply will take spot prices over $10/mcf at Henry Hub.
"It is unclear why markets are making what seems like such a risky bet on supply when history suggests a clearly negative outcome for price. Perhaps the impact of Winter 2017-2018 gas consumption has not been fully appreciated. November 2017 through April 2018 gas use was 16.5 tcf or 91.1 bcfd.
That exceeds the previous Winter 2013-2014 record by 0.8 tcf or 4.3 bcf/d. During that winter, weekly average Henry Hub prices reached $6/mmBtu.
January 2018 gas consumption was a remarkable 107 bcf/d!"
"It is unlikely that the U.S. will have an overall gas shortage this winter, but it is probable that prices will move higher as inventories are consistently drawn down. A normal winter will lead to short-term price spikes in local markets similar to what occurred last winter. History suggests that prices will almost certainly reach $4.00 to $4.25 weekly averages during the coming winter, and that much higher prices are possible."
"Americans have considerable faith in the wisdom of markets. It is worth noting that what markets do best is to force efficiency. That sometimes comes only after they occasionally get things wrong."
[/u]
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MY TAKE: The first colder than normal week in December will take the January NYMEX contract over $4.00. Two colder than normal weeks in December will take it to $5.00. My prediction is that gas in storage will dip below 2,750 Bcf by December 31st. That will cause MAJOR CONCERNS among the utility companies serving the big cities. A bidding war for gas supply will take spot prices over $10/mcf at Henry Hub.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural gas storage
The Wall Street Gang is FINALLY starting to notice how tight the natural gas market really is:
Read this from BLOOMBERG: https://www.bloomberg.com/professional/ ... bernation/
Read this from BLOOMBERG: https://www.bloomberg.com/professional/ ... bernation/
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group