Posted on 06/06/2022 1:09:28 PM PDT by blam
U.S. natural gas fundamentals remain bullish as above-normal temperatures drive cooling demand and dwindling supplies that would’ve been used for the next winter season cause market tightness, sending futures for July delivery soaring 9.5% to $9.340/mmbtu as of 1315 ET.
Houston-based energy firm Criterion Research sheds more color on the natgas fundamentals driving prices higher. They report a combination of factors, including above-average temperatures in the Lower U.S. 48, natgas demand, slumping natgas production, and below-average national stockpiles, which have driven July contracts above $9.
The Lower 48’s weather outlook has come in warmer this morning, with the latest models showing a warmer than average forecast for mid-June (versus the ten-year average.)
The week ending 6/17 should bring impressive natural gas demand numbers of 65.5 Bcf/d, marking the highest we’ve seen this summer.
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The warmer trend can especially be seen in states such as Texas, where ERCOT is forecasting record-high summer generation.
While the demand side of the equation comes in strong, U.S. natural gas production has been struggling since the start of June. Volumes quickly fell after June 1 and have remained off of the May highs.
Although general production growth is widely expected through year-end by most energy analyses, the speed at which that production comes online is the main concern. Higher production rates will be needed to fill national storage inventories before the winter, especially if summer temperatures continue to come in above-average.
At Criterion, the latest iteration of our long-term supply & demand forecast, we have adjusted our Fall EOS target to a lower 3.19 Tcf, which marked a drop from the last forecast for a 3.25 Tcf level.
The current situation may remain uber bullish and could push natgas prices even higher as summer begins and driving season is underway, which puts upward pressure on energy markets.
Higher U.S. demand versus Europe has compressed the E.U.-U.S. natgas spread (1mo ahead vs. futs).
And in fact, US natgas futures are now trading at a premium to Day-Ahead EU NatGas prices.
Soaring natgas prices will only mean the cost of power will rise. We outlined the cities where power bills will skyrocket this summer as threats of rolling blackouts increase.
“Plenty of natural gas out there.”
Correct.
But stupid, anti American people have decided to take Russian gas off the market.
And it takes years to being new fields to market.
I'm worried about the cooling problem this summer...beginning right NOW!
If you heat with gas, it would be a good time to hedge your costs for Q3/Q4.
There are natural gas ETFs out there. Buy them.
We are little leaves being bounced around on this stream. Instead of squeaking like little children who cannot do anything…take action now. People should have taken action in February. UNG was $14 then. Now it’s $31.
The “Perfect Storm” is leftists. It’s all on them. From the wu-flu to lockdowns to supply problems to pipelines. All on them.
Perfect Storm = Brandon Incompetence.
Lotta perfect storms going on….
Yeah...I wonder what my rather large, brainwashed, commie, law grad Texas niece will think when the Houston area has blackouts for air conditioning soon?
“””They report a combination of factors, including above-average temperatures in the Lower U.S. 48”””
The journalist who wrote the above statement paid far too much for their worthless journalism degree.
Good point, blam.
‘’’This globally priced commodity has tripled in price.”””
Natural Gas tripled in price when it was $7.50.
Today, Natural Gas has almost quadrupled in price when it hit $9.40.
FReepers be sure to check you next electrical bill, it will not be a pleasant surprise.
See my tagline.
Hopefully the Brandon supporters get a reality check.
“”””If you heat with gas, it would be a good time to hedge your costs for Q3/Q4.
There are natural gas ETFs out there. Buy them.
We are little leaves being bounced around on this stream. Instead of squeaking like little children who cannot do anything…take action now. People should have taken action in February. UNG was $14 then. Now it’s $31.””””
Good point. FReepers need to stop complaining and start stocking up on non-perishable food items.
Let the Leftists be the whiners who will soon be paying 5 bucks for a pound of pasta.
I lived there for 20 years. I kept hearing that it was the most air conditioned city on earth.
They will not accept blackouts...you know that!
study.
“This nation should be getting on a wartime mobilization basis to BREAK these chokepoints, and recognize that the problems are not just economic, but existential.”
Instead Biden plans to eliminate tariffs on subsidized Chinese solar panels so he can destroy what little solar panel manufacturing exists in the USA.
They're probably more likely to get a welfare check.
Rigs aren’t the problem. Putting pipes in the ground to move it is. Almost impossible the lay pipes because of Biden’s regulations.
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