Tag Archives: LNG

Natural gas imports and exports and their effect on the U.S. energy market

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For those of you watching the natural gas markets (and you should be as they remain important to both retail gas and power prices), there continues to be a stubborn resistance to the idea that prices should be higher than a year ago. You might ask - isn’t there enough shale gas out there to keep NYMEX gas futures below $3.00 per MMBtu? There isn’t one answer; rather, it’s the “death by a thousand cuts” scenario. Some of our previous blog posts have covered long-term impacts of potential liquefied natural gas (LNG) exports that should start later this decade. But, what about the present?

One key change to U.S. supply-demand has been the impact of imports and exports. While supply has been unquestionably strong due to the shale gas boom, there has been a significant decline in net imports simultaneously.

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Houston-based company wins LNG export approval. Direct Energy weighs in.

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There was big energy news last week as the Department of Energy approved Freeport LNG’s request to export liquefied natural gas to nations that do not have a Free Trade Agreement (FTA) with the U.S. See the link below – one of many on this topic. Freeport is now likely to be the second large export terminal to be built in the U.S. with additional sites still awaiting approval.

There was an impact on natural gas futures trades on the New York Mercantile Exchange (NYMEX). While prices for all terms rose last week for reasons that may not have been directly related to this news, there was one trend of particular interest. While near-term prices were up, long-term prices moved up more which is unusual. The NYMEX prices for the next 12 months have risen by $0.21/MMBtu over the last 6 days while prices for Calendar 2017 have risen by $0.30/MMBtu. Near-term prices have been supported by warm weather, but long-term prices reacted to the news about Freeport.

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Are U.S. natural gas exports increasing? Direct Energy weighs in.

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This week, Bloomberg Energy published an article with comments from the White House about natural gas exports. I took a few moments to weigh in on the potential impact.

One key bullish factor in the natural gas markets is the potential for Liquefied Natural Gas (LNG) exports. Although such exports are not expected until 2015 and beyond, the discount of U.S. natural gas prices compared to much of the world makes eventual exports a real possibility. And consumers, especially large manufacturing and chemical operations, are fearful that exporting our cheap gas abroad could push prices higher, thereby taking away their energy advantage.

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