Blue Lacy Advisors, LLC - November 23, 2022 Natural Gas Market Commentary
Minneapolis, MN | December 8, 2022 | By: Steve Sinos, Blue Lacy Advisors, LLC
The final stats for September gas and power usage are in for the US, and it looks like natural gas continued its trend of capturing market share from coal. Net generation across the US was up just 0.9%, but natural gas consumption grew by >13% versus a drop in coal consumption of 16.2%. That translates into an additional ~134 Bcf of natural gas consumption, making the 74 Bcf reduction in the 5-year storage deficit even more impressive and helping to confirm the weakness in prices during September and leading into October.
Weather forecasts have consistently called for this trend to abate “next week” and are doing so again. Early December cold is expected to set in, driving demand up and possibly accelerating the pace of storage withdrawals. This would coincide with Freeport’s advertised initial start, though the traders I talk to remain skeptical of the pace at which they can get that plant running.
*This summary is based off November 23, 2022
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Meet the Author!
Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.
He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.
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