Storage is heading to below the bottom of the 5 year threshold. At some point it will favorably impact valuation. They have upside if gas can regain a modestly higher trading range. NG Production is now falling and LNG exports are not that far off after this withdrawal season ends.
Still clueless? There are ZERO LNG exports from the lower 48 states, only a small amount by pipeline to Mexico. How can exports be on the rise when they haen't een started yet and won't for a few years. The infrastructure is still under construction and the first LNG export facility will not be ready for a couple of years more.
On the other hand, the EIA predicts rising NG production through 2040. There will always be winter seasonal price spikes but NG is not likely to hae any sustained rise in prices for years to come as production will still overwhelm demand. Not saying NG goes back to the $2s but back to the high $3s/low $4s by spring is pretty much a certainty imo.
It's a seasonal (winter) effect).
Once we get close to spring NG will be back where it was, probably high $3s, low $4s.
EIA predicts rising NG production all the way through 2040 with effectively no limits.
That is totally absurd. You have no idea what gas prices will be. Right now the conventional wisdom is that there will always be an abundance of gas but the economics of shale gas will not allow this much supply in the future simply because it is marginal in many plays. Furthermore, the price next injection season will largely depend on storage carryover in April. If we drawdown storage enough, the price could easily be in the $4-5 range next injection season. Right now, we will hit the lower threshold of the 5 year inventory range by Feb. 1.
I entered into a position with NDRO today. I felt like I needed some diversity away from the Cornerstone funds, although those have been good to me the lasts twelve month. Thanks for your insight!