Teri Viswanath, analyst for Credit Suisse, has lowered the firm's gas price outlook for 2009 and 2010. "We are lowering our 2009 and 2010 U.S. natural gas price forecast to $3.92 from $4.00, and to $4.642 from $5.14, respectively, based upon our view that the combination of relatively stable supplies and lower demand will continue to weigh on U.S. natural gas prices through 2010," she says. Given the year-long reduction in gas drilling, it is not surprising that Credit Suisse's forecast for domestic production calls for a sharp decline next year. What is surprising is that the firm believes that the significant drop in domestic production will have very little impact on natural gas prices. "We believe that higher worldwide liquefaction capacity, combined with weaker global demand, will ensure that U.S. supplies remain somewhat stable as rising LNG imports offset declining domestic production," says Viswanath. "Relatively stable levels of supply and lower demand should continue to weigh on U.S. natural gas prices through 2010." The bottom line? Investors should consider selling the balance of the 2009 NYMEX strip, she says.
Recommended Reading
DNO Acquires Arran Field Stake, Continuing North Sea Expansion
2024-02-06 - DNO will pay $70 million for Arran Field interests held by ONE-Dyas, and up to $5 million in contingency payments if certain operational targets are met.
E&P Highlights: Feb. 12, 2024
2024-02-12 - Here’s a roundup of the latest E&P headlines, including more hydrocarbons found offshore Namibia near the Venus discovery and a host of new contract awards.
ChampionX to Acquire RMSpumptools, Expanding International Reach
2024-03-25 - ChampionX said it expects the deal to extend its reach in international markets including the Middle East, Latin America and other global offshore developments.
Trio Petroleum Secures Option to Acquire 20% Interest in Asphalt Ridge
2024-01-08 - Trio Petroleum Corp. secured an option from Heavy Sweet Oil to acquire a 20% production share in the Asphalt Ridge heavy oil development project.
W&T Offshore Beefs Up Shallow Water GoM Holdings
2024-01-22 - W&T Offshore believes it can meaningfully increase production on the six new properties through workovers, recompletions and facility repairs.