Prior to the EIA report, major polls found analysts expecting an increase in the low 100s Bcf. The Energy Information Administration fed the bears with the fifth straight triple-digit https://zephyrnet.com/what-will-happen-to-oil-prices-in-case-of-a-global-recession/ storage injection this autumn, a record for this time of year. The 111 Bcf build easily surpassed the 73 Bcf five-year average injection and the year-earlier increase of 91 Bcf.
In other words, U.S. sellers have been able to supply more gas to Europe by diverting export cargoes, rather than by selling gas that would otherwise have been used domestically. In my view, if U.S. natural gas prices rise in the coming weeks, winter weather is likely to be a bigger driver than LNG exports.
A brief overview of the natural gas market
The outlook portends light national demand and larger-than-normal storage builds. Early estimates submitted to Reuters ranged from injections of 40 Bcf to 102 Bcf, with an average increase of 62 Bcf. Looking ahead, analysts on Enelyst were looking for a seasonally Forex solid build with the next EIA report, covering the week ending Oct. 21, though estimates were mostly shy of triple digits. But there’s not enough LNG to meet all of Europe’s energy needs, says Salih Yilmaz, senior oil analyst at Bloomberg Intelligence.
Typically, these storage facilities are operated on an annual cycle, withdrawn during the peak winter months, and injected with gas during the off-peak summer months. Investors should understand the risks before buying natural gas stocks. Since it is an inverse fund, it moves in the opposite direction of the natural gas price, on a daily basis. Day trading natural gas is speculating on its short-term price movements. Physical natural gas isn’t handled or taken possession of, rather all the trading transactions take place electronically and only profits or losses are reflected in the trading account. Diversifying away from natural gas immediately after the war broke out was made easier by several other energy sources at Europe’s disposal, Ryhana Rasidi, gas analyst at energy consultancy Kpler, told Fortune.
Four Key Takeaways for your Energy Purchasing Strategy
Russia’s war with Ukraine, higher travel demand and other drivers sent U.S. crude oil prices from around $75 at the start of 2022 to multiple peaks above $120 across the year. The company’s diversified refinery base is located throughout the U.S., Canada and the U.K. As a result, the analyst maintained a Buy rating on the stock with a price target of $160. Sorbara believes that EOG’s «track record of execution and shareholder returns with its cash-rich balance sheet» https://twitter.com/forexcom?lang=en provides «differentiation and optionality, in our view.» More encouragingly, earlier this month, the company outlined plans to increase shareholder distributions to a range of $10 billion to $12 billion by the end of 2024 through stock buybacks and dividends. In addition, PSX’s board of directors approved a $5 billion increase to the company’s share repurchase program, which brings the total amount of stock buybacks authorized by the board since 2012 to $20 billion.
- This is a chance for them to pay higher dividends to investors or to invest for future growth.
- As a result, the analyst maintained a Buy rating on the stock with a price target of $160.
- If EQT were a country, it would be the 12th-largest gas producer in the world.
- Europe has offset the sharp falls in Russian gas supplies through LNG imports, as well as alternative pipeline supplies from Norway and elsewhere.
- Russia is such a dominant player in global energy markets that there’s no way to completely fill the gap it leaves behind.
Putin may have hoped that his saber-rattling about natural gas, and the high prices it has triggered, would convince Europeans that Russian gas is vital and can’t be easily replaced with renewable energy. But ironically, this tactic may already have created a lasting distaste that fast-tracks Europe’s pivot to offshore wind, Euro-North African hydrogen hubs and U.S.