Related: Saudi Arabia, Russia To Cut 1.05 Million Bpd In November However, global gas consumption is forecast to inch up by 0.4% next year. According to the agency, global natural gas markets have been tightening since 2021 despite global gas consumption declining by 0.8% this year as a result of a record 10% contraction in Europe and flat demand in the Asia Pacific region. The International Energy Agency (IEA) has predicted that global gas markets will remain tight next year as Russian piped gas supplies dwindle despite gas demand falling in Europe in response to high prices and energy saving measures. The longer-term outlook is, however, favorable for the bulls. “ While demand was particularly weak with Hurricane Ian, Cove Point LNG offline, and weather-driven demand at a seasonal nadir, the soft market is indicative of further downside risks ,” Rubin told NGI. LaRose’s sentiments are echoed to NGI by EBW Analytics Group senior analyst Eli Rubin, who sees “extremely weak” prices in the physical market.
If they can not, a more substantial test of the $6.600-6.220 zone, even a drop to $5.730-5.713-5.689 is possible from here”. ICAP Technical Analysis analyst Brian LaRose told Natural Gas Intelligence that the bulls are in trouble because they “ can not seem to find their footing, and they need to do more than just prevent natural gas from selling off.
The bears will point out that natural gas markets have started the new month on the defensive amidst rising open interest and volume, exposing further weakness with prices looking likely to dip as low as $6.00 per MMBtu in the near-term. The thesis is that even as Europe is filling its storage faster than anticipated, it’s still below 2021 levels, and some areas of the natural gas supply chain will remain highly attractive under any circumstances provided that Europe continues to attempt to reduce–or remove–its dependence on Russia for energy. With Russia cutting natural gas supplies to Europe, the bulls are eyeing bigger opportunities in natural gas, with funds parking their money into dividend stocks that could benefit from Europe’s energy crisis and protect against inflation.įunds are now parking their money into stocks such as Enbridge (NYSE:ENB), Cheniere Energy, Energy Transfer (NYSE:ET) and Pembina Pipeline Corp (NYSE:PBA), as well as into ETFs such as the Alerian MLP (NYSE:AMLP).
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