Category Archives: environment

Chris McGill 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.

Posted in environment, Natural Gas, Natural Gas Market Indicators, weather | Leave a comment

Chris McGill 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.

Posted in environment, Natural Gas, Natural Gas Market Indicators, science, weather | Leave a comment

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.

Posted in energy, environment, Natural Gas, people, weather | Leave a comment

Richard Meyer Natural Gas Market Indicators: June 13, 2014

Natural gas pricing for July delivery has kicked around the $4.50 to $4.60 per MMBtu mark so far this June. The NYMEX strip shows natural gas prices at Henry Hub trading below $4.70 through this coming winter then falling near $4.10 by next year’s shoulder season.

Crude oil prices have climbed as summer in the northern hemisphere approaches. At $104 per barrel, the West Texas Intermediate marker for prompt-month delivery trades $3 higher than averaged in April. European Brent trades at $109 per barrel or a $4+ premium to WTI.

Relatively mild weather continues to persist across the lower 48 states, bringing with it strong injections of gas to storage. While temperatures in absolute terms have been relatively mild, the count of cooling degree days have been about 23 percent warmer than normal across the country. Regionally, the Northeast has been cooler than normal while the rest of the country has been warmer.

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 energy, environment, Natural Gas, weather | Leave a comment