For the archives. I have little interest whether its $4, $8, or $20 (not to be taken out of context). I think the story is fascinating. And the story is only going to get more interesting.
I'm still taken by the irony of all of this. Had the US government killed the natural gas industry like it has killed the crude oil pipeline story, Europe would be in a huge world of pain.
Only through serendipity were all those export terminals approved and constructed between 2016 and 2021, and now new projects will pretty much be rushed through the approval process as long as they are not in the backyard of any really important person.
LNG maintenance reduced gas export volumes in April by 8%, according to Refinitiv vessel tracking data, as Sempra (SRE) and Freeport LNG both took trains down for 2-3 weeks of maintenance.
However, as maintenance wraps up in May, export volumes are set to accelerate. Outside the US, Chevron and BP both flagged falling international LNG production volumes in Q2.
Maintenance outside the US is likely to increase reliance Gulf of Mexico exports into Europe during the quarter.
Domestically, it's still early in the earnings season; however, gas producer SM Energy flagged falling Q2 production volumes. Pioneer, Diamondback and Hess's US business all flagged declining Q2 volumes as well. While the latter three are more economically exposed to oil, each company produces a significant portion of associated gas.
Although US natural gas supply growth is curtailed, or declining temporarily, demand is strong. A heat wave has led the Energy Reliability Council of Texas "ERCOT" to forecast record seasonal demand for power this weekend. Meanwhile, alternative fuel sources, namely coal, are becoming increasingly expensive. It's well understood that seaborne thermal coal prices have reached record levels following Russia's invasion of Ukraine; however, US in-basin pricing is also hitting decade highs east of the Mississippi (ARLP) (ARCH).
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