Author Archives: Mike Pomorski

Expectations for natural gas supply and demand balance in the United States for 2010 seem to be clearly rationalized in the futures market where price stability is the current order. Said another way, two months does not make a trend, however, it does appear that gas prices have entered a period of relative stability despite cold, then warm, then cold weather, production freeze-ins and political uncertainties – factors that have previously influenced natural gas price volatility.

In addition, analysts appear to be quickly turning from the fortunes of the 2009-2010 winter heating season and factoring in potential storage net injections, as well as natural gas into power generation for the coming summer, as part of the forward view of 2010 natural gas markets.

Visit this link to download the full Natural Gas Market Indicator. Topics covered include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Record amounts of snow in the mid-Atlantic and periodic cold temperatures in many regions of the country have not been able to shake-off the relative strength of U.S. natural gas supply this winter heating season. Henry Hub cash and futures prices remain stable in a $5.30-6.00 per MMBtu range and seem to be rational in a market still sporting high levels of working gas in underground storage, firm daily production and demonstrated flexibility from Canadian and LNG sources.

To some waiting for a domestic production fall, it remains remarkable that rig operations in the United States are on the increase again and that the majority are clearly targeted to sustain and grow more natural gas production capability in the country.

Visit this link to download the full Natural Gas Market Indicator. Topics covered include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Natural gas consumption in the United States (including exports to Mexico) exceeded 100 Bcf per day for the ten-day period January 3, 2010 through January 12, according to Bentek Energy, LLC. It is not uncommon for daily peaks to reach 100 Bcf or more, however, it is unusual that it they would last for ten consecutive days and that they would occur relatively early in the heating season.

The positive working gas balance compared to recent years has disappeared but inventories remain near normal even with the early heating season cold. And still natural gas market acquisition prices (cash and futures) remain in the $5.00 to $6.00 range for the balance of the winter – a continued testament to supply optimism for the coming year.

What are the questions ahead: Will large volume industrial use of natural gas rebound in 2010?  Will gas continue to take historical market share from coal in electricity generation? What volume of gas will be required to refill underground storage during the coming net injection season? With a gradually rising national rig count and supportive pricing cause domestic production to remain firm or even grow as it has for the past three years?

Visit this link to download the full Natural Gas Market Indicator. Topics covered include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Rig Counts, Pipeline Imports and Exports, and LNG Markets.