2024-04-16 17:14:59 ET
Summary
- LNG feedgas is down more than the drop in Lower 48 gas production.
- The drop has pushed the U.S. gas market back into a surplus.
- The dilemma for investors/traders is that the natural gas futures curve is in steep contango, limiting any upside potential from a bullish bet.
- For investors, we advocate buying liquids-rich producer with natural gas exposure. That way, you won't be exposed if natural gas fails to recover.
- For traders, we advocate buying summer gas prices near $2/MMBtu for a bullish bet.
In our NGF reports as of late, we pointed to the tightening market fundamentals we were seeing for natural gas. Lower production coupled with structurally higher demand this year will result in a gradual recovery in the market. Until, of course, Freeport had "issues" again and LNG feedgas is down meaningfully. The drop in LNG feedgas has sent the U.S. gas market, once again, back into a surplus....
Read the full article on Seeking Alpha
For further details see:
LNG Gas Export Drop Sends The Natural Gas Market Back Into Surplus