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Drastically Different End-of-Season Natural Gas Positions in South vs. West

Minneapolis, MN | March 6, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC


Weekly Summary


The message of lower prices, infrastructure constraints, wide basis, and a curve that is persistently in contango seems to be getting through to producers in North America, finally. Combined US and Canadian natural gas-directed drilling activity dropped from 250 rigs to 237 from the last week of January to this week’s report, even though both countries reported one additional rig running this week relative to last week.


According to the latest report, 85 gas-targeted rigs were running in Louisiana, New Mexico, and Texas, down from a peak of 92 during February. At the same time, Baker Hughes estimates 436 active rigs were targeting oil in Texas and New Mexico, of which 348 were in the Permian, highlighting the potential for infrastructure constraints in the Permian and associated gas to become a constraint to oil production.


*This summary is based off February 24, 2023


A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!

 

Meet the Author!



Phone: +1-832-413-3124


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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