Nat gas moving in the right Direction for a change Hendry hub today $2.58

It’s funny how the flips and their cheerleaders only post negativity surrounding the O&G industry ..I wonder why???

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How soon until it hits the $3.00 mark?

Unfortunately I don't think us the mineral owner will ever receive $3 gas in this basin. Hopefully we can realize $2 soon because we are still (minus) 0.70 from henry hub BEFORE deducts. Ouch! 

What`s driving the increase in NG pricing now?

What`s going on with NG pricing?   It`s going in the wrong direction now!

great questions......volatitlity around natty gas has been rather high latley.....

bearish data points...lng shipments down last 3-5 months, production higher than demand, local hubs pricing well below henry hub.....5 year storage numbers are near the highs aproaching 4TCF in storage......

bullish data points......production is getting cut, EIA estimates 85.5 bcf/d for 2021.....has been trending in the 90-95 bcf / d.......

lower rig counts, E&P companies shutting in production, rigs, and only budgeting new wells based on free cash flow going forward, LNG shipments starting to pick back up.....potential colder than average winter.......futures are $2.50 and higher for all of 2021........

bottom line, local hub price matters to royalty owners, henry hub does not....Dominion South, appalachia region was trading tight to Henry Hub however recently blew back out to $1 neg differential......whats' this all mean, your check stubs will continue to be lower until that differential shrinks again.....need either early cold weather or just the high storage levels to work lower........a combo of both would be best....

hang in, natty gas most likely will continue to stay volatile under old man Winter is here.......

btw, next week brings another bit of brisk cooler than normal air down from Canada....we need more of these to get those heating days up....

Outside of 2021, how does 2022 & beyond look for the gas industry?   It can`t always depend on the weather.

crude oil is huge swing difference for natty gas........why>?  permian oil, more rigs, more drilling, more natural gas, as those wells are massive and produce mucho natty.......

If crude stays below $55, the future is bright for the gas industry, albeit one MAJOR caveat.....natural gas E&P discipline.....

given $3 natural gas, do operators in the Haynesville (huge natty gas in east texas) and the operators across Appalchia stay disciplined in their approach to new well development.  IF, IF all the operators only drill on their FCF (free cash flow), the estimates for natty gas in 2022 ARE WAY TOO LOW......you could see sustained natty gas prices of $3, and winter months approach $5....im not talking about the one week spikes we see in winter, Im talking about Henry Hub being $4.50 - $5 for a 3-4 month period.....

however, if the operators continue to fill all the supply in 2022 cause they are drilling, excuse my langugage, drilling their 'asses off' again, there will be a continued cap on the price of $3-$3.50.

LNG shipments are going back up to 7-9 bcf / d in 2021, and that will continue to work higher over the next few years.

Eventually, the cracker plant opens outside Pitt, ngl's get a price uplift and that helps the Appalchian basin, timing unknown.

Thus, the major items to keep an eye on are crude oil prices, rig counts, storage data, and how natty gas E&P operators decide to drill in a new pricing environment.  

Lastly, unfortnately, natty gas, atleast on the margin, the 5%, 10%, and 20% swings we see weekly / monthly are dependent on the weather, not sure that changes anytime soon....the underylying fundamentals of natty gas are improving over the next 12-24 months....

I am bullish natty gas, i forecast oil to stay in the $35-$48 range, WTI, until the world is fully open.....at that time we have to see where supply / demand levels settle into, and that will determine the new range of crude.....outside of political events, i see that settling $10 +/- $50 / barrel.....sustained levels north of $60 and USA rig counts in the major oil basins will move substantially higher from current levels.  Which creates the cycle all over again......

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