Supply

With so much new supply hitting the market over the next few years, and with incremental demand from the Gulf Coast, natural gas producers haven’t seen the last of widening basis differentials, according to RBN Energy LLC’s Rusty Braziel.

October natural gas is set to open 2 cents higher Wednesday morning at $2.99 as traders balance near-term cooling with an ever more active tropical storm dynamic. Overnight oil markets were mixed.

Worldwide liquefied natural gas (LNG) supply appeared to swamp demand in 2016 as new capacity came online, but big buyers snapped up more cargoes and new participants emerged, basically evening out the supply-demand picture, according to Royal Dutch Shell plc.

A wave of liquefied natural gas (LNG) supply will hit the market over the next three years, but rising demand and a dearth of new project advances on the horizon will make for a supply shortage in the early 2020s, analysts at Bernstein Research said in a note Tuesday.

Thailand’s PTT Public Ltd. Co. has struck an agreement with BP plc for about 1 million tonnes per annum (mtpa) of liquefied natural gas (LNG) for 20 years beginning in 2017. LNG is to be sourced from BP’s supply portfolio, including the Freeport LNG export project in Texas.

The pace of technology continues to accelerate, all to the good of tight sands and shale formations, which should extend and expand the unconventional natural gas and oil boom, according to ExxonMobil Corp.

Increasing northern shale production has prompted TransCanada Corp. to announce a C$655 million ($490 million) addition to its supply collection network in Alberta and British Columbia (BC), Nova Gas Transmission Ltd. (NGTL).

North America’s unconventional oil production from shale and tight formations will remain a “major source” of global supply growth until 2030, with output to 2040 rising faster than initially forecast because of lower costs and improved productivity, the Organization of the Petroleum Exporting Countries (OPEC) said Tuesday.

Oil and natural gas industry costs have improved sharply since late 2014, but overall supply costs remain high, suggesting that it’s going to take stronger commodity prices to sustain global operations, BMO Capital Markets analysts said in a new report.