The natural gas market today seems to be all about supply. Gas production is currently at levels not seen since the early 1970s. Likewise, storage inventories are at or are near their highest from week to week. If Canadian or LNG imports surge a little this summer, then the gas will likely be going into storage. It has happened before.
Examining the natural gas market today is not rocket science. What is difficult is predicting which short-term factors will come together and for how long – summer heat and power generation, supply disruptions due to hurricanes (remembering that even these have demonstrated more modest impacts on total production due to the growth of onshore unconventional resource development) and fallout from the current Gulf of Mexico oil spill disaster seem to be at the top of the list. The Energy Information Administration now estimates an 85 percent chance of a more active than normal Atlantic basin hurricane season. Which market influences will coalesce first?
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.