Natural Gas Price Forecast - Mar 15
Posted: Mon Mar 15, 2021 1:35 pm
Raymond James updated natural gas price forecast 3/15/2021
"We remain convinced that current oil/gas strip pricing will drive a massive domestic gas supply decline and leave us dramatically short natural gas in late 2021/ early 2022. U.S. natural gas production and U.S. LNG exports have experienced strong and largely offsetting recoveries since mid-2020 – both were revised slightly higher in today’s model update. Only weather (mild earlier this winter, and extreme last month) has been a notable moving piece of late. Looking forward, demand is back to nearly normalized levels. Meanwhile, producer discipline and limited incremental northeast pipeline takeaway capacity should keep a lid on the U.S. natural gas supply response. With this context, we still think price-induced demand headwinds are necessary to keep year-end 2021 U.S. natural gas inventories at normalized levels. As such, we still believe Henry Hub prices comfortably above $3 are necessary in 2H21. Looking to next year, our model suggests Henry Hub prices at $3.30 would keep the market balanced."
RJ is forecasting HH ngas prices of $3.25 in Q3 and $3.50 in Q4. $3.30 average for 2022 if we have a normal winter.
MY TAKE: As I point out in my Saturday podcast, we have sufficient ngas supply to make it through Q2, but this summer gas in storage will remain well below the 5-yr average. Much higher ngas prices will be needed in Q3".
"We remain convinced that current oil/gas strip pricing will drive a massive domestic gas supply decline and leave us dramatically short natural gas in late 2021/ early 2022. U.S. natural gas production and U.S. LNG exports have experienced strong and largely offsetting recoveries since mid-2020 – both were revised slightly higher in today’s model update. Only weather (mild earlier this winter, and extreme last month) has been a notable moving piece of late. Looking forward, demand is back to nearly normalized levels. Meanwhile, producer discipline and limited incremental northeast pipeline takeaway capacity should keep a lid on the U.S. natural gas supply response. With this context, we still think price-induced demand headwinds are necessary to keep year-end 2021 U.S. natural gas inventories at normalized levels. As such, we still believe Henry Hub prices comfortably above $3 are necessary in 2H21. Looking to next year, our model suggests Henry Hub prices at $3.30 would keep the market balanced."
RJ is forecasting HH ngas prices of $3.25 in Q3 and $3.50 in Q4. $3.30 average for 2022 if we have a normal winter.
MY TAKE: As I point out in my Saturday podcast, we have sufficient ngas supply to make it through Q2, but this summer gas in storage will remain well below the 5-yr average. Much higher ngas prices will be needed in Q3".