Strange Days Indeed, Encore Edition – In a Year of Change, Market Fundamentals Are Key to Understanding What Comes Next

In refined products, the U.S. is seeing softening domestic demand growth for traditional fuels as efficiency improves and biofuels gain ground, but pockets of the country, particularly along the East and West coasts, remain highly dependent on imported gasoline and jet fuel, a potential pain point given the Iran-related market disruptions. Those market dislocations led refined fuels prices to increase at a rate even faster than crude oil, widening some refiner margins. Phillips 66 Chief Economist and VP of Investor Relations Sean Maher will join us on Day 2 to discuss global trends in energy and refining and their profound impact.

The story for natural gas and NGLs is far different from crude and refined products. Where domestic crude supplies have trended sideways recently, volumes for gas and NGLs continue to climb, testing the limits of export capacity. That means infrastructure growth: processing plants, pipelines, storage and export docks.

The global natural gas and LNG markets were among the most disrupted by the war. After Iranian retaliation effectively blocked the Strait of Hormuz, stranding large volumes of LNG, Qatar declared force majeure, effectively reducing global LNG supply by roughly 20%. Later in March, Iran struck Qatar’s Ras Laffan complex, taking offline about 12.8 million tons per annum (MMtpa; ~1.7 Bcf/d) of capacity, roughly 17% of Qatar’s total. Natural gas prices took off in Europe and Asia; they have since cooled, but remain well above pre-war levels. The U.S. gas and LNG story looks a lot calmer, with the Henry Hub spot price (teal line in Figure 2 below) seemingly indifferent to movement in the global benchmarks — Europe’s Title Transfer Facility (TTF; orange line) and Asia’s Japan Korea Marker (JKM; blue line). What explains the apparent disconnect and what are the likely outcomes? On Day 2 of the conference, Novi Labs LNG guru Lindsay Schneider will review the dynamics driving the U.S. gas market, with a focus on the Permian, the Haynesville and Appalachia, then provide a comprehensive overview of the LNG market, including existing and planned export terminals, feedgas volumes and pipeline projects.

Beyond LNG, the other, albeit smaller, factor affecting gas markets is the anticipated growth in U.S. power demand, spurred in large part by AI-focused data centers. To help sort through all the ins and outs of domestic demand, we’ll also discuss how the gas and power markets are adapting to deal with the huge influx of new interconnection requests. Here, we’ll turn to Rock Graham, Senior Manager of Natural Gas Origination at NRG, to help understand the nuances of gas demand growth. 

On the NGL side of things, production has continued to grow while domestic demand remains relatively flat. The only solution for the market to balance is exports; however, those have been constrained by capacity at the dock. This combination of factors has left inventories, particularly for propane, extremely high. At School of Energy, we’ll take you through supply dynamics, how to assess the “frac” spread between natural gas feedstocks and a basket of y-grade NGLs, downstream demand drivers (including a model for understanding petrochemical feedstocks) and, finally, our assessment of future NGL export and pricing trends.

And there’s more. Beyond what we could squeeze into this short blog, there are additional modules and models we’ll cover so you can stay informed about what signals mean even before the rest of the market has caught on. If you’re going to make sense of it all, you need to understand the full value chain, from upstream to downstream, and be able to identify and analyze the right information, as in the examples above. That’s what School of Energy: Foundations is all about. It’s a lot of content, and it will provide a lot of value. You’ll gain the knowledge and connections to not only survive the next wave of energy development but also identify and capitalize on opportunities.

The conference will be held September 9-10 at the Thompson Hotel in Houston. Over the two-day, in-person conference, we won’t just tell you what’s happening, we’ll explain why markets behave the way they do and equip you with the tools — including a suite of hands-on Microsoft Excel models — to track key trends yourself. If you’re not familiar with the School of Energy, the conference is structured more like a classroom experience, assessing current developments through the lens of hands-on, practical instruction and training. This approach sets you up to monitor these markets, identify opportunities and understand the potential impacts of taking action. 

The course is immersive — diving into the same themes we write about each day in our blogs: production, crude oil, natural gas, NGLs, refined products and renewable fuels. We will also provide our view of today’s energy market landscape, what could be coming next and how those shifts may cascade through the other commodities. But while the coursework is intense, the venue and experience will be first-class, far beyond the typical college experience. And the whole point of the conference is connecting the dots, both conceptually and by networking — over drinks, of course — with other high-profile industry participants.

As with our previous conferences, we’ll have the whole RBN/Novi Labs crew at this year’s School of Energy, with several instructors participating in the coursework, including industry veterans and top-notch analysts. Get ready to immerse yourself in the interconnected world of energy and find out which trends major market players are pumped up about, keeping close tabs on, or finding downright nerve-racking.

For more information about the conference or to register, click here. You can save $500 if you register with the Early Bird Rate, available through August 12. For group rates, contact [email protected].  Space is limited, so save your spot today!