Interim report arrives as the U.S. focuses on polar vortex and life-saving heating fuels
Austin, TX (February 7, 2019) – Drillinginfo, the leading energy SaaS and data analytics company, has released its annual Natural Gas Winter Update, the latest installment of its FundamentalEdge series. This interim report covering natural gas market fundamentals arrives the U.S. experiences a relatively normal winter contrasted by headlines fixated on the deadly impacts of the polar vortex in the Midwest.
“While the press may be focused on the polar vortex in one region of the country, we continue to look at America’s overall energy production and use, and how that affects markets globally,” said Rob McBride, Senior Director of Market Intelligence for Drillinginfo.
“While production in the Northeast and Permian continues to grow, storage levels entered the winter at record lows. Early cold led to extreme price volatility which has since subsided as storage levels and weather returned closer to normal,” added McBride.
Key Takeaways from Drillinginfo’s Natural Gas Winter Update:
- Natural gas production continues to reach record high levels driven mainly by the Northeast. Multiple pipeline expansions were brought online at the end of 2018.
- Demand for natural gas in the U.S. increased significantly driven by both weather and structural factors (increased gas-fired power generation and increased LNG export capacity).
- Despite strong production growth, storage inventories remained at historical lows throughout summer 2018. This left the market vulnerable to early weather fluctuations.
- Drillinginfo expects U.S. storage inventories to normalize by the end of the withdrawal season. Reaching a level between 1.2-1.4 Tcf by April 1.
- Following the strength in prices in the winter of 2018-19, natural gas prices are expected to average 2.75/MMBtu in 2019.
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