FX Empire - Natural Gas Price Fundamental Daily Forecast – Production Surge Continues to Weigh on Prices

July 11, 2018 – FX Empire

Natural Gas Price Fundamental Daily Forecast – Production Surge Continues to Weigh on Prices

By: James Hyerczyk

Essentially, the natural gas market shifted from a weather-driven market to a production-driven market. This turned the tide on the bulls, forcing them to give up hope for $4/MMBtu prices in mid-June even while forecasts still called for an extended heat dome over most of the United States into mid-July…

Read the full article here: https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-production-surge-continues-to-weigh-on-prices-515276

...According to RBN Energy LLC analyst Sheetal Nasta, “It’s no surprise that Lower 48 production has been on a tear lately” given capacity expansions in the Northeast and high rig counts. “What has taken the market by surprise, however, is the abruptness and sheer strength with which production has surged in just the past couple of weeks.”

“It wasn’t until the second half of June that output shifted into high gear,” Nasta said. “If we compare average volumes in the week-ended June 7, versus the week-ended June 28, we see that total Lower 48 dry gas production zoomed higher by about 1.5 Bcf/d in that time to 81.8 Bcf/d by June 30, with the bulk of those gains occurring in the last week of the month.”

“The production gains have continued into July,” with recent data showing volumes hitting a new high at 82.2 Bcf/d over the weekend. “That’s a whopping 10 Bcf/d higher than this time last year. It’s no wonder that Henry Hub futures, which touched the $3/MMBtu mark in late June, have whimpered back 15 cents or so since then.”