Feed Me - U.S. LNG Feedgas Demand Has Additional Upside Beyond New Capacity

Friday, 10/06/2023  Published by: Lindsay Schneider  rbnenergy.com

Excerpt.  Link to full article with charts - https://rbnenergy.com/feed-me-us-lng-feedgas-demand-has-additional-....

As we head into winter, U.S. feedgas demand is likely to grow, potentially back to that record-breaking level we saw in April, if global gas prices remain strong, which at this point seems likely. Although the market has loosened from last year, overall it is still tight and cold weather will only exacerbate that tightness and send prices higher again. But beyond that, there is possible upside in the summer market as well, which has the potential to put upward pressure on prices and increasingly tie the Gulf Coast and Henry Hub to markets in Europe and Asia. Imagine a summer like 2022, when European storage inventories were very low and utilities and others there were desperately trying to rebuild stocks ahead of winter by calling for more LNG cargoes. A repeat of that scenario would push up feedgas demand in the U.S., putting upward pressure on Henry Hub prices and — depending on U.S. market conditions — potentially widening the basis, the differential between regional U.S. markets and Henry Hub. (In other words, Henry Hub prices would rise relative to the delivered cost of gas elsewhere in the U.S.)

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