Analysis Shows Natural Gas Primed for Bigger-than-expected Spike

Power generation demand, LNG exports and reduced production will combine to push prices higher than the market anticipates.

natural gas outlook

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The natural gas price is primed for a significant bump a year from now, even if futures traders have yet to acknowledge it, Enverus said in a recent webinar.

The forecast stems from this year’s dramatic reduction in oil and gas production caused by the COVID-19 pandemic’s effect on the global economy. Enverus thinks that sets up a winter inflection point, with gas production still declining in oil plays and little to no increase in pure gas plays, said Amber McCullagh, Enverus senior vice president.

“What that means for the market is you go from historically high storage inventory levels to start this winter to historically low storage inventory levels as soon as the end of this winter,” McCullagh said.

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Joseph Markman

Joseph Markman, senior editor for Hart Energy, covers markets and provides data analysis for all Hart Energy editorial products.