ARC's Take on NG | Russell T. Rudy Energy LLC
As I have stated in previous posts, in my opinion, ARC Financial offers some of the most insightful analysis of what is going on in the oil and gas markets. These are effectively illustrated periodically via easy to understand charts with annotated observations. Recently I perused their August 30 issue and gleaned the following observations that relate to natural gas.
Futures-Gas prices tend to be higher during cold weather, and the colder the better. Futures contracts reflect this. By the end of this year prices are expected to be $3.12 per Million British Thermal Units (MMBtu). Futures prices throughout 2017 will follow the seasonal pattern and be at $3.12 at year-end. However, 2018 prices will shift downward, fluctuate seasonally, and end the year at $2.97.
Exports-LNG exports are expected to drop next month as Cheniere’s Sabine Pass facility in Louisiana is closed for planned maintenance. However, natural gas exports to Mexico are higher than last year and continue to rise even through the summer months.
Production-Dry gas production has continued to rise since 2007. The amount of gas being injected into storage is dropping, but stocks are still near a record high for this time of year.
Demand-Total U. S. demand is up compared to last year. This is partly attributable to power generation. A hot summer is leading to strong demand for power for air conditioning. This has led to stronger gas prices, but is making coal more competitive. Industrial demand is on the rise, but subject to seasonal fluctuations.
Drilling-The number of drilling rigs targeting gas has been falling since 2012 and continues to do so.
To follow’s ARC Financial Charts, please go to http://arcfinancial.com/research/energy-charts/forecast-more-energy-rain-or-shine/ .
Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide. Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.
