Pine Cliff Energy Ltd T.PNE

Bullish Fact - Net Summer Capacity

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I believe there was a key comment in the EIA weekly Natural Gas Update:

Net summer capacity (or the maximum output that generating equipment can supply to system load at the time of summer peak demand) has been increasing for natural gas and declining for coal. Natural gas-fired combined-cycle generation capacity increased from 218 gigawatts (GW) in 2012 to 278 GW in 2021. By comparison, the capacity of coal-fired power plants declined from 305 GW in 2012 to 211 GW in 2021.

Should we have a hot summer Natural Gas use could set records for electrical generation for air conditioning load (just like Jan 2022 - space heater demand).

Coal inventory demand is high, prices are high relative to Natural gas and inventories are low. Asian & European demand for coal is high due to lack of natural gas availability and sky high prices.

North American Natural Gas (Henry Hub & AECO) prices are somewhat decoupled from TTF & JKM because the US  is constrained in its ability to ship more LNG as it is already running at full capacity.

Heres to hoping for a long very hot summer and few interuptions for LNG shipments during hurricane season.

I believe there may be a scenario where we might see drawdown of Natural Gas Storage during 1 of the weeks in July & August. That would be a real shocker for the markets. I think its possible if another 0.8 bcf/d of LNG is commisioned and production doesn't exceed 3% growth in 2022.

It will be an interesting Summer as long as:
1) Economy doesn't falter due to interest rate pressure and supply chain disruptions.