Is Natural Gas a mess right now?Storage surplus vs 5 year in the US is over 600 BCF.
There's a view that prices are so low that they can only go up. But there's an opposite view that in fact, going into low season with so much gas in storage and with natural gas being the swing supplier (and within natural gas, dry gas being the swing supplier vs associated) for power generation, that things are only going to get worse. On top of it, LNG is down for a variety of reasons.
Yesterday natural gas was only 36% of powerburn.
Dry gas producers cutting back only 3-5% and continuing to operate so many rigs is simply not going to work IMO.
At this point as a producer if you are not hedged, you absolutely should not bring any new dry or drier gas wells on line in Q2 or Q3 is my guess. Might even want to hedge some...(I'd certainly hedge more oil right now, these are good prices).