Nat Gas News – January 31, 2017

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Weekly Nat Gas Analysis

Analysis by Martin Trotter

After ending the previous week on a high note, front month prices slid over 3.5% on Monday to close at $3.23.  Despite the newest EIA January 2017 Short Term Outlook calling for nearly 10% increases of gas-fired power capacity by the end of 2018, markets have been susceptible to volatile weather in closer months.  Monday saw calls for warmer-than-average temperatures prevailing strongly in the southwest and reverberating through the midcon and southeast in both the 10 and 16 day outlooks. These forecasts leave only small pockets in the northeast projected to require more demand than typical for this time of year.  In addition to short term weather volatility, uncertainty surrounding the current political landscape between the U.S. and Mexico calls into question the stability of nearly  65% of U.S. natural gas exports.

In the News

Capacity for natural gas-generated electricity expected to rise

FuelFix reports: The U.S. Department of Energy expects the capacity of natural gas-fired power plants to grow over the next two years, despite rising costs of natural gas. The use of natural gas to generate electricity continues to grow while the use of coal declines, as it has over the past five years, according to the Energy Department. Low natural gas prices in 2016 and federal environmental regulations meant to curb emissions from coal-fired power plants have driven the country’s shift to natural-gas. Most of the nation’s new natural gas-fired power plants are getting built in Texas and the Mid-Atlantic states, where the country’s biggest natural gas shale plays are. Last year, natural gas prices were the lowest since 1999, a price plunge in part driven by technology that unlocked previously unreachable reserves of natural gas in shale formations.. The Energy Department expects natural gas prices to rise in 2017 and 2018, as demand during a colder than average winter depletes natural gas in storage. For more visit fuelfix.com or click the following link http://bit.ly/2joRr4A

U.S. natural gas slides 3% amid warmer weather

Investing. com reports: U.S. natural gas futures declined on Monday, starting the week off with heavy losses as forecasts showing cold weather receding in key regions in the U.S. during the next few weeks dampened demand for the heating fuel. Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns. Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 83 and 94 billion cubic feet in the week ended January 27. For more on this story visit investing.com or click the following link http://bit.ly/2kMg4Z8

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The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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