NGSA: ‘Neutral pressure’ on gas prices expected this winter

Based on an analysis of the economy, weather, demand, production, and storage, the Natural Gas Supply Association expects flat price pressure on the natural gas market compared with last winter, NGSA said in its 13th annual Winter Outlook 2013-14.

NGSA used data from Energy Ventures Analysis (EVA) for its demand and supply projections and data from IHS Global Insight for its economic projections.

“When NGSA weighed all the different pressure points, the picture that emerged for the upcoming winter is one of quiet growth in supply as well as in demand for natural gas,” said Greg Vesey, NGSA chairman and Chevron Corp. vice-president of gas supply and trading. “The stability in natural gas is great news for consumers,” said Vesey. “When all key supply and demand factors are combined, we expect neutral pressure on prices compared to last winter.”

EVA projects similar levels of combined gas demand this winter vs. last winter because of similar weather and economic conditions. Demand from the industrial sector is expected to increase 3.5% from last winter, EVA forecast. The development of petrochemical, fertilizer, steel, and gas-to-liquids industries will sustain healthy growth in industrial demand over the remainder of this decade, EVA said.

Residential and commercial sector demand is projected to be flat, while demand from the electric power sector is expected to decline slightly, due to less fuel switching from coal to gas in power plants this winter compared with last. “Coal-to-gas switching is expected to continue for a sixth straight winter, but switching is forecasted to average 4.2 bcfd rather than last winter’s near-record amounts,” said Vesey.

On the supply side, another winter of strong production and storage levels is expected by NGSA’s outlook. “The shale revolution has ushered in a remarkable era, as evidenced by dramatic growth in production over the last 5 years. This winter’s supply is expected to be even more robust than last year, but characterized by subtle changes that are indicative of the ability of the competitive gas market to adjust to customer’s needs,” Vesey said.

Vesey said, “For example, a solid 8% of this winter’s production is expected to come from associated gas, a number that has been quietly growing for four consecutive winters. The growth of associated gas explains how natural gas production continues at strong levels despite a 28% drop in the number of gas well completions. We expect associated gas to continue to be a key component of winter supply as oil drilling in the Bakken and Eagle Ford shales continues and new gas infrastructure is put in place to reduce gas flaring.”

Vesey added, “Abundant shale gas has even affected storage patterns. Since 2009, we’ve seen the peak date for storage inventories become a moving target, shifting by a week or more on average to a later peak in mid-November. The proximity of Marcellus shale gas to consuming regions in the East has changed the way the market uses storage.”

Vesey concluded, “The important takeaway is the strength and responsiveness of natural gas supply. Since the onset of shale production on a large scale, we’ve had winter after winter of level price pressure.”

Contact Conglin Xu at conglinx@ogjonline.com.

Related Articles

Statoil reduces capital budget by $2 billion following 4Q losses

02/06/2015 Statoil ASA has reduced its organic capital expenditure to $18 billion in 2015 from $20 billion in 2014. The move comes on the heels of a fourth qu...

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...

Union strike ongoing at US refineries as negotiations continue

02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue...

NCOC lets $1.8-billion pipeline contract for Kashagan field

02/06/2015 North Caspian Operating Co. (NCOC) has let a $1.8-billion engineering and construction contract to ERSAI Caspian Contractor LLC, a subsidiary of Sa...

AOPL releases 2015 safety performance and strategic planning report

02/06/2015 The Association of Oil Pipe Lines is committed to further improvements despite a 99.99% safe petroleum liquids delivery rate, AOPL Pres. and Chief ...

MARKET WATCH: NYMEX oil price bounces back up somewhat

02/06/2015 Crude oil prices on the New York market bounced up $2/bbl to settle slightly above $50/bbl Feb. 5. The positive momentum continued during early Jan...

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected