Author Archives: Richard Meyer

Richard Meyer Natural Gas Market Indicators: August 29, 2014

As we enter September, analysts will look for signs of supply disruption during what is normally the most impactful period of the Atlantic hurricane season. In addition, chatter may develop around the status of underground storage inventories. Current views are that said inventories may be 300 Bcf lower (about 3.5 Tcf in early November) compared to the recent past, when a volume of 3.8 Tcf seemed to provide a level of comfort for analysts. Thus a storage deficit. But is that really the right question to be asking.

Recent data shows, and many analysts believe, that domestic natural gas production will continue to grow with infrastructure constraints being overcome in critical areas of the Marcellus play. In fact, many believe that domestic production will grow to 70 Tcf per day by the start of the 2014-15 winter heating season. If that is so, then flowing gas will exceed that of the 2013-14 winter season by about 4 Bcf per day. Over a 150 day winter heating season that means another 600 Bcf of gas supply may be available to the national market that was not available one year ago.

Without another record-setting winter for much of the nation maybe the question should be, how is the market going to accommodate the supply surplus over the balance of the coming winter? The fact is it is never that arithmetic or simple. Demand side questions, such as what new natural gas demand, is now institutionalized are completely legitimate. That is what makes this analysis so fun. Time always gives us the answers to our questions, if we are listening.

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: August 15, 2014

With underground storage exceeding 2.5 Tcf by August 15 and nearly 80 days remaining in the traditional injection season, an inventory of 3.5 Tcf or more to enter the winter appears very likely. A strong summer long injection season has been supported by cooler than normal temperatures, minimal supply disruptions due to hurricane activity and continued growth in domestic production.

When the 2014-15 winter begins, the nearly 4 Bcf per day of incremental production growth dating back to the beginning of the year will still be with us and will be a part of supply assets in place to meet winter heating season demand. Efficiency measures will still be putting downward pressure on average consumption per customer and in the local gas utility segment, more distribution pipeline will have been modernized creating a safer system. So many moving parts – and so many moving in the right direction.

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 31, 2014

The end of July has brought with it softening natural gas prices, the result of a confluence of supply and demand elements. Only a few months ago, some analysts questioned whether natural gas storage levels would be able to make a comeback following an 11-year record low for inventories at the end of the winter season. Today, we see natural gas volumes injected into storage at rates not seen in more than a decade and prices in the sub $4 range. Modest temperatures, seasonally low power generation load requirements, and record natural gas production are all ingredients into this summer’s recipe for relatively low Henry Hub prices and the supply position in which the country now finds itself immersed. That said, there still remains two months of summer, three months in the underground storage injection season, and an Atlantic hurricane season that has just gotten underway. Factors to keep an eye on include an uptick in temperatures; natural gas requirements for power generation; dry gas production flows; and supply issues related to disruptive weather events, such as storms in the Gulf of Mexico. However, even if one or more of these possibilities materializes, the US is still in a strong supply position – a fact that the market may be taking into account.
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 and Rig Counts.
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 15, 2014

As the northern hemisphere summer is half way through, perhaps it is a good time to take stock of where we are at.

On the supply front, production is as strong as it has ever been, with near record-breaking levels of dry gas produced at volumes more than 68 Bcf per day since June. Supplies directed toward storage have been similarly robust with a record setting eight straight weeks of 100+ Bcf injections since May. In other words, production is solid and supplies are rebuilding.

On the demand side, cooler summer temperatures compared with 2013 have eased power burn demand this July by nearly 2 Bcf. Industrial and residential-commercial demand are up slightly, as well as exports to Mexico. Therefore, the decline in July demand overall relative to last year is only 0.6 Bcf per day.

The result of this supply-demand balance is a natural gas price at Henry Hub of $4.11 per MMBtu – well below where the summer season began. This suggests that the market sees a sturdy supply portfolio that is able to meet both short-term demand pulls and seasonal storage obligations as operators refill for next winter. In other words, the market is behaving in an expected fashion.

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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