SPECIAL REPORT
| July 02, 2010
Chop-chop: Power sector fuel competition should keep summer gas prices moving sideways
AFTER NATURAL GAS PRICES JUMPED NEARLY 20% DURING THE FIRST HALF OF JUNE, several voices declared that coal was set to reclaim its entire lost market share in power generation. Gas-fired combined cycle units certainly lost some appeal for baseload power generation – but only briefly and not all of it. Fuel switching in the power sector has introduced an unprecedented measure of flexibility to the natural gas market and this flexibility should keep inventories meandering along a path toward the … .......
GLOBAL OIL RECAP AND BALANCES
| June 10, 2010
June 10, 2010
Please find attached summary tables illustrating the latest crude oil fundamental projections from the IEA , OPEC , and the US Department of Energy for June 2010.
DATA INSIGHT
| May 27, 2010
Hanging in the balancing item
THE EIA IS SCHEDULED TO RELEASE ITS LATEST MONTHLY NATURAL GAS STATISTICS TOMORROW, and most eyes will focus on a select few data points – domestic production, industrial consumption, and power sector gas burn. The report will cover data through March and many observers seem to be anticipating that Lower 48 production will build on February’s strong 57.5 bcf/d, suggesting that production is once again on the upswing. Indeed, if the February estimate is accurate, US gas production reached its hi… .......
SPECIAL REPORT
| May 19, 2010
Father Time vs. Mother Nature: Will the clock run out on US natural gas prices?
THE CLOCK IS TICKING FOR US NATURAL GAS PRICES. Following a period incredibly devoid of weather-related energy demand, US inventories have climbed to 2.09 tcf, exceeding last year’s record for the first week of May by 97 bcf (+4.9%). Yet the market has failed to establish direction, chopping sideways as sentiment has cycled from bearish to bullish no less than four times since March. We have argued that the 2010 market would be marked by prices caught within a narrow range, unlike the persisten… .......
SPECIAL REPORT
| May 10, 2010
Product Placement: Recent US distillate demand strength not just a flash in the pan, but gasoline demand should lag
APART FROM THE MARKET UPHEAVAL CAUSED BY GREECE’S DEBT CRISIS across asset classes, global petroleum markets continue to exhibit significant fundamental uncertainties for the balance of the year. On the supply side, Iraq, Iran, and Nigeria present a plethora of risks hinging on both internal and external strife. On the demand side, all eyes are fixed on China and the Middle East, both of which hold the potential for substantial consumption growth spurred by surging economies. But as the US e… .......
SPECIAL REPORT
| April 19, 2010
Message in a Bottleneck: The number of uncompleted gas wells may rise yet again, but for very different reasons
AFTER LAST SUMMER’S ONCE-IN-A-GENERATION BEAR NATURAL GAS MARKET, people are looking to last year’s for clues about likely outcomes in 2010. With the hullabaloo regarding the EIA’s new production estimation methodology dying down, some market observers are pointing to a growing reserve of uncompleted wells to draw a parallel to last year’s market. Just like last year, they suggest, a bevy of wells waiting to deliver gas into the system will limit the upside to any rally. The reservoir of uncomp… .......
SPECIAL REPORT
| April 12, 2010
The Unit: How a detailed approach can clarigy the mysterious dynamics of coal-to-gas switching
Please find attached the latest LCMC Special Report: The Unit How a detailed approach can clarify the mysterious dynamics of coal-to-gas switching COMPETITION BETWEEN NATURAL GAS AND COAL IS ARGUABLY THE MOST IMPORTANT FUNDAMENTAL FACTOR FOR THIS SUMMER’S GAS MARKET and also the least understood. Entering the 2009 summer, the prospects for fuel switching had seemed mysterious. By the end of the summer, everyone agreed that coal displacement had been occurri.....
SPECIAL REPORT
| March 26, 2010
Russian Roulette - Expectations of repeat natural gas production cuts are likely to be disappointed
AFTER COLLAPSING THROUGH THE SPRING, RUSSIAN NATURAL GAS PRODUCTION ROARED BACK IN THE SECOND HALF OF 2009. Faced with collapsing European consumption and far cheaper gas in the spot market, Gazprom’s customers slashed their offtake of Russian oil-indexed exports from 4Q08 through 2Q09, forcing Gazprom to dramatically curtail production. In all, from Nov08 through Sep09, Russia had cut output an astonishing 3.15 trillion cubic feet vs. the same period a year earlier, making way for record LNG f… .......
SPECIAL REPORT
| March 02, 2010
Wiggle Room: Increased flexibility should prevent natural gas time spreads from blowing out this summer
A BRUTALLY COLD WINTER WAS UNABLE TO SEND US NATURAL GAS PRICES SOARING, BUT IT HAS CREATED ENOUGH FLEXIBILITY TO PREVENT A REPEAT OF THE 2009 SUMMER. Having fallen 13.0% since mid-February, the summer NYMEX strip has fallen to just below our targeted level. Though we expect the summer strip to overshoot to the downside this spring, we now shift our view of Jun-Sep prices from bearish to neutral and even anticipate strength relative to coal. Although front-end spreads may exhibit bearishness in… .......
DATA INSIGHT
| February 08, 2010
Straw Man: Beware broad year-on-year comparisons of US natural gas fundamentals
WITH ENORMOUS SEASONAL SWINGS IN GAS DEMAND, YEAR-ON-YEAR FUNDAMENTAL COMPARISONS SEEM ONLY NATURAL. Weighing balances against those from the same calendar month last year usually entails less adjustment than weighing them against balances from 2-3 months prior or against historical norms. Although comparisons to historical balances are useful, a single-minded focus on year-ago levels can often prove misleading and frequently provide a straw man for those predisposed to make bullish or bearish … .......