Is a Significant Oil and Gas Upside Reprice Incoming?
(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author)
In this week’s preview of what to watch in oil and gas markets, Rigzone’s regular energy prognosticators look at oil and gas prices, pandemic effects, cold fronts and more. Read on below to find out the specifics.
Rigzone: What developments/trends will you be on the lookout for this week?
Mark Le Dain, Vice President of Strategy with the oil and gas data firm Validere: As market participants come back from vacation, I wouldn't be surprised to see gas and oil significantly reprice to the upside one of these early weeks in January. For oil, it would be in response to the continued draws during a period where we need to be building stocks for summer. For gas, it would be in response to forecasts for January that have come in much colder than expected and the reduced imports from Canada as that cold front was present there last week.
Tom Seng, Director – School of Energy Economics, Policy and Commerce, University of Tulsa’s Collins College of Business: Cold fronts are finally starting to enter the lower-48 U.S. states which should prove bullish for natural gas and heating oil. The discrepancy between rising virus cases yet supposedly milder symptoms needs to be rectified for the market to gauge its real possible impact on future energy demand. Closures and mask mandates are occurring.
Jon Donnel, Managing Director, B. Riley Advisory Services: Natural gas prices in Europe plummeted during the week as over 30 cargoes of U.S. LNG are heading to the market to help alleviate the lack of supply that drove prices to record highs. Despite the recent pullback, prices are still about five times above recent averages and the higher input costs have created demand destruction in industrial sectors. Warmer than normal temperatures have also helped to ease prices and lower demand, but some forecasts are indicating colder weather ahead which could reverse these trends.
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