A note this morning from our Mid-Atlantic energy analyst friend:  

We have written a few notes in the past year about the new arenas for potential gas-on-gas competition in markets that previously were potentially underserved. This is a normal capitalist result of easy money, large resource volumes, and relatively free regulatory constraints. We have identified the period 2016 to about 2023 as the period of infrastructure for the natural gas markets. With so many moving parts involved in the production, transportation, and end use of the resource being undertaking simultaneously, it is virtually certain that imbalances and unforeseen glitches in the markets will become manifest.

Also, as we are fond of observing, trends tend to run in finite cycles of about seven to ten years (see slide below from prior presentations), so that what appears to be a market need today may change entirely by early in the next decade.

The article below is a continuation of a note we wrote on 10/25 about the tenuous supply/demand balance forecast for about 2022. Given the amount of pipeline capacity being planned and/or underway, it is quite possible that there could be an oversupply of capacity, especially to the Gulf Coast region. This is not necessarily good news for Utica/Marcellus producers. They may welcome having some optionality for their gas besides other directions, but they may find themselves at an economic disadvantage against producers from oiler regions that could theoretically afford to unload their gas for any cash contribution available.


Too Much Gas on My Hands! – Is the U.S. Gas Market Headed For More Oversupply, Pipeline Constraints?



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