BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to: Latest news headlines Analytical topics and features Commodities videos, podcast & blogs Sample market prices & data Special reports Subscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

IF you are a Platts Market Center subscriber, to reset your password go to the�Platts Market Center to reset your password.

In this list
Natural Gas

Surging supply to ease pressure on US natural gas prices this summer: NGSA

Natural Gas | Natural Gas (North American)

Market shrugs as natural gas storage lags in US Midwest

LNG | NGL

Platts LP Gaswire

Commodities | Natural Gas | LNG | Marine Fuels | Tankers | Banking

18th Annual LNG Conference

Natural Gas

MVP's latest cost increase -- a big one -- expected to eat into operator's returns

Surging supply to ease pressure on US natural gas prices this summer: NGSA

Washington — Growth in US natural gas production will outpace the rise in demand, resulting in "flat pressure" on prices this summer compared with last year, the Natural Gas Supply Association said in its 2018 summer outlook.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

NGSA expects an all-time production record of 80.4 Bcf/d on average for the summer in the Lower 48 states, up from 72.5 Bcf/d last summer, amid stabilized production from declining basins, surging Northeast output and high Dominion South prices.

"When NGSA weighed the various factors, the picture that emerged for the upcoming summer is one of remarkable growth in demand," said NGSA Senior Vice President Jenny Fordham. Nonetheless, "with more than enough supply to meet demand, we anticipate flat pressure on prices compared to last summer," she said.

The outlook is based on data from Energy Ventures Analysis, the US Energy Information Administration and IHS Economics. It examines five variables -- weather, economy, demand, storage and production -- and assesses whether they put upward or downward pressure on prices.



Energy Ventures Analysis projected record-high demand overall for the 2018 summer, mostly driven by new gas-fired generation as well as LNG exports. Overall customer demand is estimated to be 75.9 Bcf/d, up 8.9% from a year earlier.


POWER-SECTOR DEMAND SEEN RISING 10%


Power-sector demand is forecast to grow 10% compared with last summer, mostly due to new gas-fired generation and warmer temperatures in June, July and August, in addition to some short-term coal-to-gas fuel switching driven by prices.

An added 10.6 GW of new gas-fired capacity is expected to be online, accounting for about 2 Bcf/d. Coupled with low prices and low hydropower, that added capacity is seen boosting power burn by 2.7 Bcf/d summer over summer, the report said. Much of the new gas-fired capacity is expected in the East, South Central and Midwest regions.

With 6.7 GW of added gas capacity in the East and only 2.8 GW of coal-fired capacity retired, "gas-on-gas competition can be present in that region," the report said.

Coal-to-gas switching is also expected to rebound. "This summer's natural gas prices are hovering around $2.85/MMBtu in the futures market, which will continue to incentivize coal-to-gas switching," the report said.

Net LNG exports are seen growing to reach 3.7 Bcf/d from Cheniere's Sabine Pass and Dominion's Cove Point terminals. Pipeline exports to Mexico are also seen reaching 4.7 Bcf/d this summer.


INDUSTRIAL DEMAND UP MODESTLY


Industrial demand is increasing as some new projects come online; EVA said it should be 0.5 Bcf/d higher, or up 2.4%, this summer.

"Production is booming, particularly in the Shale Crescent and the Permian, and new takeaway capacity in the Northeast is helping to bring that production to eager customers," said Fordham. "Since the onset of shale production on a large scale, we've had year after year of stability for consumers."

Looking at five variables, the report forecast: overall demand will place upward pressure on prices; the weather will place downward pressure (with 5% fewer cooling degree days than summer 2017); steady growth in the economy will be neutral; higher weekly gas storage injections will place downward pressure (with 70 Bcf average weekly injections versus 57 Bcf average last summer); and the supply side will place downward pressure amid increased production and new pipeline infrastructure.

A stable market provides a buffer from most wild cards, according to NGSA, although the report flagged one factor to watch: the forecast for heightened summer hurricane activity. Summer 2018 is forecast to have a 63% probability for major hurricanes making landfall versus a 10-year average of 52%.

--Maya Weber, maya.weber@spglobal.com
--Edited by Lisa Miller, newsdesk@spglobal.com