Analysts with Goldman Sachs & Co. have increased their estimates for Marcellus and Utica shale natural gas production growth per year to a 3.5 Bcf/d to 4.0 Bcf/d range, and while the current regional oversupply situation could remain through 2015, "local saturation should ease in 2016" with up to 22 Bcf/d of new takeaway capacity helping to balance the market through 2018.
Citing "greater well productivity and greater Utica dry gas window contribution," the Goldman analysts led by Brian Singer upped annual production growth estimates from a range of 3.0 Bcf/d to 3.5 Bcf/d voiced in May but made no changes to their Henry Hub forecast "as Appalachia [supply] growth is offset by lower production elsewhere."
Northeast markets remain in the doldrums, at a sharp discount to Henry Hub, amid a glut of supply.From CNBC (read that whole article here):
The ongoing U.S. energy boom may be driving gasoline prices lower, but homeowners who heat with natural gas may be in for another winter of sticker shock.
"It is now looking almost certain that stocks of natural gas in the U.S. will be significantly lower than the five-year average" when temperatures begin falling in November," said Tom Pugh, commodities economist for Capital Economics.
"Another cold winter, combined with lower stocks than last year, could lead to even higher price spikes than last year."
Thanks to big surges in seasonal demand, natural gas producers are busy this time of year building up supplies. But despite record production, natural gas storage levels are still below their five-year range heading into the winter heating season. The latest data from the Energy Department shows that producers are playing catch-up, with storage levels more than 10 percent lower than last year's levels.So despite the fact that there is more than enough natural gas being produced, it sounds like homeowners should be prepared to not truly see the benefits of that this winter as natural gas prices will surge nonetheless.
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