Author Archives: Richard Meyer

Richard Meyer Natural Gas Market Indicators: Feb. 26, 2015

The one-two-three combination punches of cold weather to the eastern half of the United States have not been enough to pull natural gas commodity prices above $3 per MMBtu. Amid low prices the U.S. is on track to break the all-time record for February natural gas demand, suprassing the record previously set in 2014.

As demand surges, strong dry gas production continues apace as well. Flowing more than 11 percent higher than February 2014, production volumes have helped move storage volumes into a surplus relative to last year. How long this price environment will last remains to be seen. Supplies are now in a stronger place than last year or any time in recent history – which, of course, has contributed to the lower natural gas price environment.

Volumes to power generation and industrial demand are both running above last year, as have volumes to residential and commercial customers. The question remains how much more demand can the market absorb. If production continues to outpace demand growth, how long will the market continue to grow production at low prices? This year is shaping up to be another interesting one indeed.

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: Feb. 13, 2015

The push toward natural gas power generation continues. New data from FERC shows natural gas comprised nearly half the new installed electric capacity additions in 2014 – wind plus solar accounted for the other half.

For the first six weeks of 2015, natural gas volumes serving power generation are up approximately 0.8 Bcf per day compared to this time last year, remembering that January 2014 was an all-time record winter month for gas to power gen. For the nation as a whole, heating degree days have been nearly five percent fewer than normal (warmer than normal) and thus heating load is down from the previous year by about 7.2 Bcf per day.

Overall U.S. demand is down about 6.7 Bcf per day. That means it is possible that storage inventories will be higher than last year as net injections begin in the spring, leaving more natural gas available to meet summer cooling loads. This comes when natural gas prices are low compared to recent history and generators turn to gas for its pricing and environmental attributes. One thing builds on another as the market progresses in 2015.

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: Jan. 30, 2015

The idea of structural versus price-induced demand growth is playing itself out in the power generation market for natural gas this winter. Natural gas power burn has consistently pointed to increased volumes to start the first quarter of 2015 compared to 2014, at least in part due to lower natural gas acquisition prices, and as a result power demand has averaged 22.9 Bcf per day, 1.2 Bcf per day more than last January.

One cannot help but wonder with overt and subtle shifts in the power generation fleet for economic and environmental reasons across the country how much of any of these demand increases are being structurally built into normal gas demand.

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.

Posted in Natural Gas, Natural Gas Market Indicators, weather, winter heating | 1 Comment

Richard Meyer Natural Gas Market Indicators: Nov. 14, 2014

Prices for natural gas at Henry Hub remain above $4.15 per MMBtu for prompt-month contracts rising from nearer $4 at the October month-end close – not unexpected for a market anticipating winter heating season demand. With that said, the domestic underground storage position is strong (over 3.6 Tcf for the week ending November 7, 2014 in working gas) and daily dry gas production estimates are routinely averaging above 70 Bcf per day for the first time in history.

Storage injections are set to slow and reverse to withdrawals, while natural gas demand is inching up with the addition of modest home heating requirements. Analytically, one area of interest to industry watchers this coming winter may be examining demand trends in all sectors, looking at comparisons to the polar vortex winter of January-March 2014. What natural gas demand elements of that extraordinary winter are here to stay? Could there be conclusions drawn comparing the coming winter to that of last year? Might there be key signals in the industrial and power generation sectors? Time and creative analysis may tell.

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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