Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber 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

Long-term gas prices poised to jump on global demand, economy: JPMorgan exec

LNG | Natural Gas | Natural Gas (North American)

LNG developers jockey for relevance at Gastech

Natural Gas | Oil

Platts Wellscape P2P

Commodities | LNG | Natural Gas | NGL | Financial Services | Infrastructure & Utilities

Gas Storage Outlook Conference, 18th Annual

LNG | Natural Gas

Petronet deal endorses Tellurian business model in crowded US LNG field

Long-term gas prices poised to jump on global demand, economy: JPMorgan exec


A global demand boom and improving domestic economy have the potential to hike long-term US gas prices considerably higher than many might expect, despite the abundance of shale resources, an executive with JPMorgan said Tuesday.

Not registered?

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

Register Now

Colin Fenton, the company's global head of commodities research and strategy, said gas prices over the next few years could jump well beyond the commonly assumed ceiling of $6.50/MMBtu. In fact, on some days of high demand, he predicted gas prices could "spurt" up to the $7/MMBtu or $8/MMBtu level by 2016.

"Most people think this is impossible, and that's part of the problem," Fenton said at the LDC Gas Forum Midcontinent in Chicago.

Due to "a very stealth but very real change in the export posture of the US," the nation is poised to become a global gas superpower via exports of liquefied natural gas, he said.

And when producers and consumers in the West start to see gas shipped to countries such as China or Japan, "they will be very stunned to realize basis has tightened very quickly," Fenton said.

Fenton also pointed to longer-term support from an improving economy on US shores. For example, after years of decline, Pittsburgh is finally starting to see an uptick in manufacturing activity, driven largely by the mining sector -- specifically drilling for gas.

Moreover, the US must still rely on Canadian imports to meet its daily demand needs, he asserted. "The US is not self-sufficient. Even after the shale boom, demand for gas still exceeds production."

"This is a pot of water boiling on the stove," Fenton continued, adding that long-dated, forward-curve prices could jump sharply within the next few years if, for instance, interest rates are hiked or a large utility enters the market as a buyer.

Fenton said he was surprised this jump in longer-term prices has not yet occurred, but noted that many utilities are prohibited by state commissions from putting on long-dated hedges.

Yet volatility in the gas market will likely be nowhere as severe as in the oil market. Despite his higher price outlook, Fenton likened potential gas volatility to that of current-day Algonquin Gas Transmission city-gate spot pricing -- "nothing, nothing, nothing, spike."

--Jessica Marron,
--Edited by Derek Sands,