“Our top-day estimate of Lower 48 production is showing a day/day drop of more than 0.8 Bcf/d. “Lower 48 production has been underperforming of late, though we have increased our long-range expectations for growth,” Genscape senior natural gas analyst Rick Margolin told clients Wednesday. Looking at the supply picture, production has been in a “moderate retreat” recently, according to Genscape Inc. Last year, EIA recorded an 84 Bcf build for the period, and the five-year average is an injection of 82 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Tuesday at an injection of 86 Bcf. A Reuters survey produced a 78 Bcf consensus, with predictions ranging from 71 Bcf up to 85 Bcf. They may want to cover more, so there’s some additional buying pressure.”Įstimates as of Wednesday showed the market expecting a near- or slightly below-average build from this week’s Energy Information Administration (EIA) storage report. “The market should show some respect to last year, and the funds are still net short. “It’s kind of a tough call, really, but I think the combination of what happened last year” with prices spiking on early winter cold “and funds still being net short is kind of a bullish scenario. “Going into the period now,” those buying to top off storage ahead of the winter “might push up the cash prices short-term,” Saal said. Prices have gained sharply since late August, and while the momentum from that rally has slowed, there could still be upside from current levels, according to Saal. “If it was going to fall down and head straight south again, I think it would have kept going lower,” he told NGI. Saal noted that prices bounced after dropping to around $2.600, signaling support at that level.
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