Commodity market report

North America gas long-term highlights H1 2017: Permian, Montney and Northeast keep gas prices lower for longer

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Report summary

With less than 1 bcfd of supply growth in the US so far this year, strong export demand should hold Henry Hub prices well above $3/mmbtu even with weak weather-based domestic demand. However, the recovery in oil and gas drilling over the past year and pipeline expansion in the Northeast signals an increase in supply starting this summer and continuing through 2018. We expect Henry Hub prices this year to average $3.43/mmbtu and $3.27/mmbtu (nominal) in 2018. Midterm prices fall, averaging below $3/mmbtu between 2019 and 2024, as demand growth is matched with cheap supplies from the Northeast and Permian. In the longer term the Northeast pipeline capacity currently under development will fill up, and associated gas production begins to plateau. This opens the door for production recovery in the Haynesville, and continued WCSB growth. Realized prices will rise, we expect Henry Hub prices in the mid-$3/mmbtu range in the second half of the next decade.

What's included

This report contains

  • Document

    North America LNG - Imports Exports H1 2017.xls

    XLS 5.98 MB

  • Document

    North America Production-Demand-Prices H1 2017.xls

    XLS 2.50 MB

  • Document

    North America gas long-term highlights H1 2017: Permian, Montney and Northeast keep gas prices lower for longer

    ZIP 6.24 MB

  • Document

    North America gas long-term highlights H1 2017: Permian, Montney and Northeast keep gas prices lower for longer

    PDF 471.88 KB

  • Document

    Executive summary

    PDF 117.07 KB

  • Document

    Supply

    PDF 107.27 KB

  • Document

    Demand

    PDF 124.92 KB

  • Document

    Prices

    PDF 206.10 KB

  • Document

    Regas

    PDF 55.58 KB

  • Document

    Policy

    PDF 54.05 KB

Table of contents

    • After 2018, US gas prices decline to the sub-$3/mmbtu range until another round of pipeline investment is required
    • The rig count has more than doubled from a year ago, despite rising service sector costs.
    • Industry
    • Power
    • Mexico
    • Canada
      • US LNG facing risks of capacity not being fully utilised in the 2019-2023 period
    • Northeast
    • Permian
    • Canada
    • Mexico
    • LNG imports continue to fall, supported only by New England in the long term.
  • Policy

Tables and charts

This report includes 15 images and tables including:

Images

  • Year-over-year supply growth
  • Price Outlook
  • Piped export and key corridor flows
  • Henry Hub Price Outlook
  • WTI Price Outlookit
  • Permian breakevens and remaining drilling inventory
  • North America generation by fuel
  • New Northeast takeaway capacity by direction
  • Northeast production and Dominion South Point prices
  • Prices: Image 6
  • Permian supply by direction
  • Canadian and Pacific Northwest basis outlook
  • Canadian production forecast
  • US LNG capacity and exports
  • Global gas prices

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