Read the last paragraph: https://oilprice.com/Energy/Natural-Gas ... aders.html
There are seven more natural gas storage reports remaining in 2018. The first one (the week ending November 16) is sure to be a draw larger than the 5-year average. If that trend continues, we are likely to see the "Mother of all Bidding Wars" in the natural gas spot market. We are one Polar Vortex away from utility companies going into panic mode. Several large cities in the Great Lakes Region are already dangerously close to running short of gas by February if we have just a normal winter.
Keep an eye on the April 2019 NYMEX contract. So, far the price spike has been limited to the Dec to Mar contracts. We need the rest of the strip (Apr to Dec) to push over $3.00. That should draw more investor attention to our gassers.
Natural Gas Price Forecast - Nov 19
Natural Gas Price Forecast - Nov 19
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Price Forecast - Nov 19
The Wall Street Gang is just beginning to come around to what I have been telling EPG members for several months.
B.RileyFBR boosted target price for Range Resources (RRC) to $29 from $22 on natural gas price deck increase
Raising 2019+ Nat Gas Price Forecast to $3.50/Mcf;
Set up Into Winter Ideal for Upside Price Volatility;
Intermediate- to Long-term Natural Gas Market is "Structurally Undersupplied"
"Assuming a normal winter, we believe the natural gas market is set up for significant near-term upside price volatility. Our conclusion is underpinned by low current natural gas storage
inventory, limited ability for power generation to switch from gas to coal and unappreciated shift in composition of demand for U.S. natural gas to highest ever percentage of relatively price inelastic demand. We believe that, at current average futures prices through 2023 of $2.75, the natural gas market is at the cusp of entering a structurally undersupplied state beginning 2H19."
"To reflect our contrarian undersupplied market outlook, we are raising our 2019 and long-term natural gas outlook to $3.50/Mcf from $2.88/Mcf. We believe that sustained price strength is necessary to incentivize enough incremental dry natural gas supply to balance the intermediate to long-term market. From within our coverage group, we believe Range Resources Corporation (RRC—Buy, $29 PT) and Southwestern Energy Company (SWN— Buy, $10 PT) are the best ways to invest in our thesis of a higher long-term gas price outlook."
"For SWN, we maintain our $10/share 12-month price target and raise our 12-month price target for Range Resources from $22/share to $29/share. The near-term risk to our call is absence of winter weather. Longer term, delays in commencement of and inability of world markets to absorb (due to economic slowdown and trade wars etc.) US LNG exports is the greatest risk to our natural gas price outlook." - Rehan Rashid
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I want to be CRYSTAL CLEAR: I still believe that natural gas prices will pull-back next spring unless we have a COLD WINTER that drains storage to base level (~1,000 Bcf). The likelihood of that happening is increasing, but weather can change when you least expect it. If natural gas in storage is down to 2,600 Bcf on December 31st, it will take a mild first quarter to keep storage above the base load.
B.RileyFBR boosted target price for Range Resources (RRC) to $29 from $22 on natural gas price deck increase
Raising 2019+ Nat Gas Price Forecast to $3.50/Mcf;
Set up Into Winter Ideal for Upside Price Volatility;
Intermediate- to Long-term Natural Gas Market is "Structurally Undersupplied"
"Assuming a normal winter, we believe the natural gas market is set up for significant near-term upside price volatility. Our conclusion is underpinned by low current natural gas storage
inventory, limited ability for power generation to switch from gas to coal and unappreciated shift in composition of demand for U.S. natural gas to highest ever percentage of relatively price inelastic demand. We believe that, at current average futures prices through 2023 of $2.75, the natural gas market is at the cusp of entering a structurally undersupplied state beginning 2H19."
"To reflect our contrarian undersupplied market outlook, we are raising our 2019 and long-term natural gas outlook to $3.50/Mcf from $2.88/Mcf. We believe that sustained price strength is necessary to incentivize enough incremental dry natural gas supply to balance the intermediate to long-term market. From within our coverage group, we believe Range Resources Corporation (RRC—Buy, $29 PT) and Southwestern Energy Company (SWN— Buy, $10 PT) are the best ways to invest in our thesis of a higher long-term gas price outlook."
"For SWN, we maintain our $10/share 12-month price target and raise our 12-month price target for Range Resources from $22/share to $29/share. The near-term risk to our call is absence of winter weather. Longer term, delays in commencement of and inability of world markets to absorb (due to economic slowdown and trade wars etc.) US LNG exports is the greatest risk to our natural gas price outlook." - Rehan Rashid
------------------------------
I want to be CRYSTAL CLEAR: I still believe that natural gas prices will pull-back next spring unless we have a COLD WINTER that drains storage to base level (~1,000 Bcf). The likelihood of that happening is increasing, but weather can change when you least expect it. If natural gas in storage is down to 2,600 Bcf on December 31st, it will take a mild first quarter to keep storage above the base load.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group