Divergence - Nat gas vs. producers
Posted: Wed Apr 24, 2024 3:20 pm
What was happening today, nat gas futures down 9% but gas producers (AR, CRK, EQT, EOG, RRC etc.) all up substantially..
Shows again that markets anticipate turnarounds, waiting for the gas price to go up first is not a good strategy.
Was it just the EQT CEO comments on CNBC? And how long can this divergence continue..?
From Seeking Alpha:
The natural gas (NG1:COM) market is currently oversupplied, said Toby Rice, EQT Corp. (EQT) CEO.
During a CNBC interview, he said that the market has about 600 BCF (billion cubic feet) of extra natural gas and storage than the five-year average of about 1,711 BCF at 2,333 BCF.
Rice also said that two catalysts he sees for natural gas demand are power demand and summer weather.
He spoke about the “exciting emerging market” of power demand, and how “this AI revolution is only going to take place with affordable, reliable clean energy.”
AI power demand is estimated to reach 75 gigawatts, the equivalent of meeting enough power to power an additional 15 New York Cities, he said. “This is a massive opportunity here.”
Those 75 gigawatts of new power demand would amount to an incremental 13 BCF a day of natural gas.
In addition, he said that the market in the future will call for significantly greater amounts of natural gas, whether through demand from liquified natural gas growth -- an incremental 15 BCF a day, or a 15% increase in natural gas demand today -- or through powered power generation, which could be greater than 15 BCF a day, he said.
“We need to ensure that we have the ability to get energy infrastructure built in this country, whether it's a pipeline or an electric transmission line,” he said. “We need to have the regulatory support to be able to thread the needle and make these big projects real.”
Shows again that markets anticipate turnarounds, waiting for the gas price to go up first is not a good strategy.
Was it just the EQT CEO comments on CNBC? And how long can this divergence continue..?
From Seeking Alpha:
The natural gas (NG1:COM) market is currently oversupplied, said Toby Rice, EQT Corp. (EQT) CEO.
During a CNBC interview, he said that the market has about 600 BCF (billion cubic feet) of extra natural gas and storage than the five-year average of about 1,711 BCF at 2,333 BCF.
Rice also said that two catalysts he sees for natural gas demand are power demand and summer weather.
He spoke about the “exciting emerging market” of power demand, and how “this AI revolution is only going to take place with affordable, reliable clean energy.”
AI power demand is estimated to reach 75 gigawatts, the equivalent of meeting enough power to power an additional 15 New York Cities, he said. “This is a massive opportunity here.”
Those 75 gigawatts of new power demand would amount to an incremental 13 BCF a day of natural gas.
In addition, he said that the market in the future will call for significantly greater amounts of natural gas, whether through demand from liquified natural gas growth -- an incremental 15 BCF a day, or a 15% increase in natural gas demand today -- or through powered power generation, which could be greater than 15 BCF a day, he said.
“We need to ensure that we have the ability to get energy infrastructure built in this country, whether it's a pipeline or an electric transmission line,” he said. “We need to have the regulatory support to be able to thread the needle and make these big projects real.”