By Keith Kohl
Tuesday, June 30th, 2015
In 2012, the natural gas market was estimated to be worth $161.4 million. It's grown at a compound annual growth rate of 2.8%, and could reach a value of $196.4 million as early as 2019.
And the majority of this market growth will be in industrial and electric power markets.
Liquefied natural gas (LNG) is used in fertilizers, chemicals, and steel as fuel for the industrial processes involved. It is also a major player in the energy sector, as many power plants are switching to natural gas from coal or nuclear power.
Sentiment: Strong Buy
The experts are looking for a 71 this week, that would put storage at 2579 with eighteen more weeks of injections. Injections would have to average 79 weekly for storage to reach 4 TCF. The following three injections are estimated at 89, 89 and 80. Those are some decent injections for July if they come in at that range. Maybe some August heat will give NG a boost. At this time storage is looking very good so I'm not seeing much a case for a bull run but, that really doesn't matter, NG is so heavily shorted that a short squeeze could kick in at any time. Low hydro output in the northeast but, the U.S. is importing more NG from Canada. It would be easy to go long with NG=$2.60 or short if NG=$3, this $2.80 range has me sitting mostly in cash.
I see more and more so called "experts" acknowledging what the state of Texas, Louisiana, and Pennsylvania and companies like Exxon have been saying for months: PRODUCTION IS GOING DOWN, and has been going down for months. I expect many PUMP and DUMPs next month on the way to $3. Trade it.
That's right china. Much of the coal power generation that is being retired due to EPA regulations was already idle and semi-retired anyway.
I agree blue. One way or another, eventually, we will see a "deal" even if it's meaningless. No politician ("Do you know who I am" Kerry) wants to look like they failed in the public eye.
"Bullish traders could see resistance at $3.20 per MMBtu. Prices tested this mark in January 2015. The demand from power plants and the warm weather forecast could support natural gas prices."
The one point i never hear about is the fact that Iran is selling oil threw back channels. The API had a story about it and showed pictures of caravans in both directions of tanker trucks carrying oil to be sold on the black Market. How much pressure can the US apply when this is going on. I do believe we will see a deal though at some point. It amazes me how much we will bend over to make these deals. GL2ALL
"I'm wondering if any planned shut downs could come to a halt and more coal and less NG would be used for the remaining part of 2015."
Perhaps, but I'm inclined to think not. The majority of the 2015 retirements have been in the works since 2012 or earlier, and there weren't many in 2016 that weren't scheduled long in advance.
If you look at the details for the retiring coal power stations this year and next, it's fairly clear that many have been in service for 40-50 years (some as much as 70!), and are getting to the point that keeping them running-MATS or no MATS-is an expensive proposition. AEP, for example, started idling older generators years ago, and while they've made some noise about the effect of CO2 and MATS regulation, these units would never have been returned to service anyway.
gw, they're already talking about a new dead line of July 9. If they run oil down this week, I'll be tempted to grab a long position. GL
china, I'm wondering if any planned shut downs could come to a halt and more coal and less NG would be used for the remaining part of 2015. I understand that you don't think so but, it'll be interesting to see what news hits the wires going forward. I'm also curious to see if any of the retired plants could be reopened under new guidelines.