What`s causing the NG price to jump ahead?   Will this be sustained throughout the upcoming winter and beyond?

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Some analyst are calling for natural gas to go up to $12+ if we have a cold winter.

NG storage is ~20% below the five year average and the injection season is nearly over. If this continues AND we have a cold winter, the price COULD rise further. however, I wouldn't bet the farm on a big price increase. The drillers can fill up the pipelines quickly in response to higher prices.

Why is NG injection so low?   Are the gas companies intentionally holding back gas or are storage field operators just being restrictive of gas purchase, and if so,  why?

    It's only speculation on my part, but I believe it is at least partially due to a lengthy and intense cooling season, particularly in the south and west. Secondarily, low natural gas prices restricted drilling of new principally gas wells. Finally, the lack of takeaway option in the Permian has resulted in a large basis differential and forced producers to flare the gas. The main product in the Permian is oil which in a worst case scenario can be shipped by railcar or stored locally. Neither of those options is viable for natural gas. The increasing price of oil has spurred Permian drilling, while intensifying the NG problem.

For a NG well to be viable and meet a gas company goal, what is the relative ROI needed for the well?   At what price does ROI meet that goal and well production as well?   Do they want ROI in 5 years or 10 years for instance?   Some smaller gas companies seem to be ok with lower producing wells while larger ones shoot for the moon for production.

Utica wells are naturally over-pressured. This results in constant high production for several months until pressures decline and delays the steep production decline associated with shale wells. ROI's are definitely front end loaded, providing Utica wells an advantage over other plays such as the Scoop/Stack in Oklahoma. You can see this phenomenon displayed on the type curves shown in Gulfport Energy's 2Q investor presentation, located on their website. These are displayed in the Utica and Scoop Appendicies in the presentation.
I think the price is increasing from several factors. Firstly their ngl storage is low and if the winter happens to be colder then a nice increase. But the possibility alone can get have a effect. There are always new infrasture coming on line which is opening other markets. Finally I believe that demand is increasing and will continue to increase which will effect the price for sure.


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