Posts from John Abeln

To closely analyze the natural gas market is to be constantly bombarded with vast amounts of information — weather forecasts, pipeline flows, LNG feedgas, power demand and storage — that is frequently updated, impacting both spot and future prices. But before you can get into the deeper analysis, you’ve got to understand the natural gas value chain and its terminology. In today’s RBN blog, we’ll explain the various terms used to describe natural gas as it moves from wellhead to consumer. 

Moss Lake Partners has announced plans to build a massive 42-inch pipeline known as the DeLa Express to take up to 2 Bcf/d of wet gas 690 miles from the Permian across the Texas state line into Louisiana. It’s an audacious plan, and there’s little doubt that a new natural gas pipeline from the Permian to the Gulf Coast is needed to facilitate continued production growth but the proposal faces serious challenges. In today’s RBN blog, we discuss how investors, producers and potential shippers might approach this newcomer and gauge whether it’s a project that could go the distance or become just another pipe dream. 

Observers of the natural gas market over the past 20 years know that the main story has been one of enormous growth. The Shale Revolution gave new life to the U.S. natural gas sector, leading to the record production levels we are seeing in early 2024. The economy has found many uses for this new gas: increased power generation, more pipeline exports to Mexico, expanded industrial gas usage and — most prominently — the many LNG export facilities that have cropped up since 2016. But with the pause on new LNG export licenses and the push to renewables in the power sector, there’s a looming question of where the new natural gas would go if production continues to expand. In today’s RBN blog, we look at how that new gas might be absorbed, both domestically and internationally, and what continued growth would imply for gas prices and producers in the long term. 

So far this winter, front-month CME/NYMEX natural gas futures have fallen, risen and fallen again but, until their most recent dip, generally remained within the same $2.30-to-$3.30/MMBtu range where they have been lingering since mid-2023. With production sustaining near-record levels, LNG export volumes down from the winter highs, and temperatures back to normal, the supply of gas remains plentiful — a bearish scenario. In today’s RBN blog, we look at why there’s been a lid on natural gas prices — and the odds that the situation might change before the rapidly-approaching end of the winter season.