Commodity market report

North American gas markets short-term outlook May 2017: waiting for supply

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Report summary

North American gas markets haven't changed much over the past month; expected supply has yet to ramp up, having entered a holding pattern. We expect an average Henry Hub price of $3.25/mmbtu in June, but changes to weather and production could push prices as much as $0.40/mmbtu in either direction. Exports to Mexico and via LNG look to continue ramping up, and rebuilding storage inventories will result in a modest price increase this summer. Supply is the real question, though. Drilling has ramped up, but production is not yet growing, and the pace of ongoing drilling increases is also uncertain. The oil-field service market has tightened somewhat, so spud-to-production times are likely lengthening, and the weak forward curve may be making operators reticent to continue adding rigs. Because of these questions around the pace of drilling and production increases, we see upside to our outlook for $tk/mmbtu Henry Hub prices in 2018.

What's included

This report contains

Table of contents

Tables and charts

This report includes 17 images and tables including:

Images

  • Feedgas projections by terminal
  • Henry Hub price outlook
  • Cumulative production of Apache Alpine High wells
  • Contour screenshot of the Alpine High model assumptions
  • Noble Energy operated wells and divested acreage
  • Southwestern's Fayetteville wells to date – EUR vs. Lateral Length (non-normalized)
  • Supply: Image 5
  • Infrastructure: Image 1

Tables

  • Short-term price outlook
  • US supply-demand outlook (bcfd)
  • Supply: Table 1
  • Alpine High wells to watch
  • Regional: Table 1
  • Canada supply-demand outlook (bcfd)
  • Major projects
  • Mexico supply-demand outlook (bcfd)
  • US storage inventories (bcf)

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