Continuing innovations in the producing sector result in ongoing volume surplus that will outpace demand growth over the next five years
EVERGREEN, CO (July 21, 2010) – According to a new long-term market forecast just released from BENTEK Energy, LLC, the U.S. can expect to see continued relatively low natural gas prices averaging approximately $5.00 Million British Thermal Units (MMbtu) over the next five years – at least 18% lower than the average price currently reflected in the NYMEX futures strip.
“Improvements in drilling and completion techniques by many North American producers have been impressive. We’ve seen unprecedented growth in unconventional gas production, which has spawned significant pipeline construction and other infrastructure projects. These developments have altered gas price relationships across North America,” noted E. Russell (Rusty) Braziel, BENTEK Energy Managing Director. “We expect these trends to continue over the next five years. And while we see substantial demand growth ahead in the power sector, demand increases will not be enough to offset supply growth.”
This new analysis from BENTEK, called the Forward Curve Quarterly, includes a five-year forecast of U.S. natural gas production, U.S. liquefied natural gas (LNG) imports, net gas imports from Canada, demand from the residential-commercial sector and the industrial and power generation sectors. These market factors viewed over a longer-term horizon drive a forecast of continued low natural gas prices in BENTEK’s fundamentals-based market analysis.
The report finds that the North American market will continue to change dramatically over the next five years. According to BENTEK’s analysis, the power generation sector is poised for a structural shift as natural gas begins to capture market share from coal. An extended period of abundant gas supply at lower, stable prices is likely to lead to a new period of gas-fired power generation growth.
As a complement to the Forward Curve Quarterly™, BENTEK will release five Market Alerts over the next six months as part of the total Forward Curve Suite? report series. These Market Alerts will provide comprehensive details behind the five-year forecasts and market analysis presented in the Forward Curve Quarterly™. Each of these Market Alerts covers the impact of a key market sector on long-term supply/demand dynamics, including background, assumptions, pipeline flow and capacity consequences, constraints, risks and price implications.
The Market Alerts include:
- Part 1: Growth in Power Generation Demand through 2015 – includes outlook for coal-to-gas switching
- Part 2: Outlook for U.S. LNG Imports through 2015 – includes global supply/demand balances
- Part 3: Canadian Imports Outlook through 2015 – includes the impact of Ruby Pipeline
- Part 4: U.S. Production Forecast and Production Efficiencies through 2015 – includes regulatory and legislative issues
- Part 5: The Big Picture and Webinar – Long Term Outlook – includes an update and recap of the series in an interactive environment with BENTEK analysts
For more information call BENTEK at 888-251-1264.