Signs

The U.S. natural gas market shows signs of improving, but maybe not as fast as some would “expect, hope for or need,” a Houston energy investment banker said last week.

Canadian exports show signs of confirming a bleak outlook for the supply side of the natural gas trade by continuing to shrink, a view of the market that is also supported by the latest International Energy Agency (IEA) annual forecast.

The U.S. natural gas market shows signs of improving, but maybe not as fast as some would “expect, hope for or need,” a Houston energy investment banker said Tuesday.

While there are still signs of a slowed economy, for the most part major natural gas infrastructure projects in the West are still on target, albeit on a slightly smaller scale or delayed timetable, according to comments last week from executives for El Paso Natural Gas and Kern River Gas Transmission Co.

While there are still signs of a slowed economy, for the most part major natural gas infrastructure projects in the West are still on target, albeit on a slightly smaller scale or delayed timetable, according to a panel of project representatives who spoke Tuesday at the LDC Gas Forum: West & Rockies conference in Irvine, CA.

Energy analysts have begun to write off any hope for natural gas prices moving higher this year, but some see signs of recovery by early 2010.

Prices continued to fall at a majority of points Thursday, but declines were generally small at less than a dime. There were signs of new, albeit slight, firmness as several more locations were flat to 2-3 cents higher than on the day before.

All signs point to higher natural gas prices in early 2010, the energy team at Tudor, Pickering, Holt & Co. Securities Inc. (TPH) said Tuesday. According to TPH models, the plunge in drilling activity from the peak in 3Q2008 should result in wellhead supply declining by 5 Bcf/d, or 8%, at the end of 2009 from year-end 2008.

The signs of growing cash market weakness that surfaced Tuesday were confirmed hugely Wednesday. Whereas only a moderate majority of points were slightly softer on the previous day, prices fell across the board Wednesday, with many of the losses reaching double digits.