U.S. Midstream Possibly Normalizing in 2021, but Overbuild Still Major Problem, Say Experts

The North American oil and natural gas midstream sector is certainly not “out of the woods,” but 2021 could look relatively “normal” in 2021, according to Raymond James & Associates Inc.

Though driven largely by supply, the Raymond James team remains bullish on the price outlook across the hydrocarbon spectrum. The analysts said the demand-pull environment “still looks attractive” in 2021 and beyond, with the recovery in U.S. liquefied natural gas (LNG) exports adding to a “solid base.”

U.S. LNG exports “have recovered massively thanks in part to soaring Asian prices — as about as good of a recovery play as one can find within the U.S. midstream space,” said the Raymond James team, led by analysts Justin Jenkins and J.R. Weston.

Furthermore, natural gas...