This should be a Good Day for the Gassers - Dec 30
Posted: Mon Dec 30, 2024 9:13 am
At the time of this post the FEB25 NYMEX contract for HH natural gas was trading at $3.93, up 16%.
Trading Economics:
US natural gas futures rose to near $4 per MMBtu, the highest since December 2022, as bets of stronger global LNG demand magnified the outlook of higher domestic consumption.
> Fresh forecasts of a cold front in the US halfway through January drove the industry to raise demand forecasts by 18 billion cubic feet into the weekend. This coincided with data from the EIA showing that gas storage fell by over 100bcf for the second straight week, deepening the anticipated start to the withdrawal season.
> In turn, the decreasing likelihood that Europe will continue to receive Russian gas through Ukraine drove investors to take long LNG positions as EU members search for alternative gas sources.
> This raises demand for US LNG at the turn of the US presidency, with President-elect Trump pledging to issue more LNG export permits, driving firms to favor more profitable exports instead of cheaper gas sales domestically due to the ample domestic supply.
On page 5 of today's newsletter ("The View From Houston") you will find my 4 reason why natural gas prices will be much higher in 2025. The first two are the most important, but it is steps 3 and 4 that will set the "Right Price" of U.S. natural gas firmly over $4.00/MMBtu by mid-2025.
My Top Picks for natural gas are
EQT, which has already made a nice move higher
CTRA
OVV
CRGY
PR
SM < May be the best choice since it is trading at the lowest PE ratio based on my 2025 forecast
VRN
DVN
Among the Small-Caps and High Yield stocks
SDE.TO
IPOOF
BSM
KRP
I will be adding AR and RRC back to the Sweet 16 for 2025.
Trading Economics:
US natural gas futures rose to near $4 per MMBtu, the highest since December 2022, as bets of stronger global LNG demand magnified the outlook of higher domestic consumption.
> Fresh forecasts of a cold front in the US halfway through January drove the industry to raise demand forecasts by 18 billion cubic feet into the weekend. This coincided with data from the EIA showing that gas storage fell by over 100bcf for the second straight week, deepening the anticipated start to the withdrawal season.
> In turn, the decreasing likelihood that Europe will continue to receive Russian gas through Ukraine drove investors to take long LNG positions as EU members search for alternative gas sources.
> This raises demand for US LNG at the turn of the US presidency, with President-elect Trump pledging to issue more LNG export permits, driving firms to favor more profitable exports instead of cheaper gas sales domestically due to the ample domestic supply.
On page 5 of today's newsletter ("The View From Houston") you will find my 4 reason why natural gas prices will be much higher in 2025. The first two are the most important, but it is steps 3 and 4 that will set the "Right Price" of U.S. natural gas firmly over $4.00/MMBtu by mid-2025.
My Top Picks for natural gas are
EQT, which has already made a nice move higher
CTRA
OVV
CRGY
PR
SM < May be the best choice since it is trading at the lowest PE ratio based on my 2025 forecast
VRN
DVN
Among the Small-Caps and High Yield stocks
SDE.TO
IPOOF
BSM
KRP
I will be adding AR and RRC back to the Sweet 16 for 2025.