Author Archives: Richard Meyer

Richard Meyer Natural Gas Market Indicators: August 11, 2016

The average volume of natural gas flowing to power generators year-to-date in 2016 exceeds that of 2015 by about six percent, recognizing that 2015 was a record year for gas to power generation in and of itself. By comparison, consumption in the residential and commercial sectors has averaged 3.0 Bcf per day lower in 2016 (down 11 percent) compared to 2015 due primarily to the incredibly mild winter across the country during the first quarter of 2016, resulting in a total demand picture for natural gas that is down about two percent from the prior year.

To balance the market, production had to fall and has done so by decreasing about 300 MMcf per day on average year-to-date. Balance – that is the theme for this summer – is captured by pricing movements, which started much closer to $2 per MMBtu earlier in the year, rose to near $3 for futures contracts at Henry Hub and have since retreated. Balance – an appropriate theme as we watch the Olympic gymnastics competition from Rio.

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

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Richard Meyer Natural Gas Market Indicators: July 28, 2016

Nearly 10 U.S. nuclear reactors have announced intent to retire through 2019. The nearly 9 GW of nuclear capacity these plants represent has a gas burn equivalent of 1.35 Bcf per day, according to estimates from Bloomberg New Energy Finance. This represents the potential upside for natural gas as it fills the gaps created by the shuttering nukes.

Looking at the more immediate, natural gas to power generation reached 41 Bcf per day at times during July. When that occurs net storage injections are usually reduced and daily volumes of added working gas fall into low single digits. Even for a day or two national inventories can indicate as much gas coming out of storage as going in or even a net withdrawal (estimated small net withdrawal by Bentek Energy for July 25).

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

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Richard Meyer Natural Gas Market Indicators: June 15, 2016

The market is showing clear signs of tightening. Slowly falling production is eating into supplies while strengthening demand from power burn and exports means the balance into storage this June has been well below average. This deficit gives a little relief to a market with storage stocks at levels about two months ahead of schedule for a typical injection season.

The market has rationalized itself with rising prices, up now $0.60 from that $2 sticking point witnessed through much of the winter. Key to this balance, as always, will be summer weather. If temperatures drive more cooling demand, the bullish injection deficit is likely to persist.

Conversely, mild temperatures could mean additional volumes into storage, which would likely prove bearish for this market. However, the potential for additional exports through year-end may offer some additional flexibility on the demand side.

As these factors adjust in relation to each other, it’s important to step back and recognize that given the diversity and strength of demand and the rapid evolution in upstream activity just how resilient this market has been, as evidenced by lower and relatively stable prices for natural gas.

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

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Richard Meyer Natural Gas Market Indicators: May 26, 2016

Energy policy and related environmental issues are very likely to be key elements of the upcoming presidential race, which follows the party conventions this summer. Defining a lower carbon energy future for the country within the context of macro-economic realities and consumer choices may be served back and forth like a tennis ball at Wimbledon as the candidates outline their positions.

While that is happening, gas market events such as the trends in production, availability of underground storage to accept daily injections, the price relationship between coal and natural gas, demand for gas in power generation, and many other potential factors may influence the short-term market and preparations for the 2016–17 winter heating season. While you are watching the bouncing political ball, we will keep our eye on these other things.

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

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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