Based on higher power burns and lower production, Henry Hub prices look likely to strengthen steadily toward $2.50/mmbtu this injection season, and we believe the market won't test storage limits. In June, prices at the Henry Hub should remain relatively stable in the $2.00 to $2.25/mmbtu range with a normal weather average of $2.10/mmbtu. In the winter of 2016/2017, we expect prices to rise and hold strong through 2017, as delays in Northeast pipelines limit the extent to which low-cost Marcellus and Utica wells can meet growing gas demand outside the region, and while other plays offer attractive breakevens and returns, Lower 48 production is expected to decline until prices and thus cash flows return, and even then, the lag in rig and crew mobilizations mean that any supply growth will be weighted toward the back half of 2017.
This report includes 12 file(s)
North America gas markets short-term outlook May 2016 PDF - 632.88 KB 19 Pages, 7 Tables, 9 Figures
Basis Outlook.xls XLS - 128.00 KB
Demand Detail.xls XLS - 755.00 KB
Industrial Index.xls XLS - 121.50 KB
LNG Detail incl Export.xls XLS - 230.50 KB
NGL Price Outlook.xls XLS - 104.50 KB
Northeast Takeaway Capacity.xls XLS - 466.00 KB
Power Demand Curve.xls XLS - 102.00 KB
Price Outlook.xls XLS - 135.00 KB
Storage Outlook.xls XLS - 142.50 KB
Supply Demand Balances.xls XLS - 314.50 KB
Supply Detail.xls XLS - 265.00 KB
Volatility in oil markets and the growth of unconventional gas supply have created a high degree of uncertainty about future gas demand and the direction of gas prices.
This Gas Markets Short Term Outlook report forecasts future pricing, based on deep analysis of gas supply and demand fundamentals. Additionally, it addresses complex questions on gas flows, identifies future opportunities and informs fuel purchasing strategies.
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Commodity market report | May 2016
North America gas markets short-term outlook May 2016
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