Natural Gas - Not Yet
A week ago, we wrote that the natural gas market is at a major turning point. With Lower 48 production growth slowing, 2024 looks much tighter than we had previously expected. But as we warned in the report, we said:
The Longer Term View
Whenever we are at a turning point, it's very important to review the longer-term outlook. In this case, this is what we see for 2024:
Lower 48 gas production growth will slow.
LNG gas export expansion doesn't come until year-end.
Other demand drivers will have to push the market into a bigger deficit.
In essence, it's hard to make the argument that 2024 prices will match that of 2022. There aren't that many demand drivers that can get us there, so unless this winter proves to be especially bullish (colder than normal), prices won't deviate much from where the futures curve is trading today.
Many of the things we noted in the report will take time to play out. And in terms of timing, the natural gas market is best characterized as "not yet".
Looking at our latest natural gas storage projections, you can see that we are going to still be bloated relative to the 5-year average: