Natural Gas Supply Association Summer 2014 Outlook

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A series of slides from the NGSA that shows, in essence, they believe the short-term summer price for natural gas in the U.S. to rise over last summer because of depleted stores of natural gas. It will take extra capacity to bump up the "gas in storage" and because of the increased demand, the NGSA says the price will tick up.

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Natural Gas Supply Association Summer 2014 Outlook

  1. 1. Summer Outlook Cooling Season 2014 1
  2. 2.  Looking Ahead to Summer 2014  Market pressure points: demand, economy, weather, storage & production  Wild card factors  Summer expectations  Summary 2014 Summer Outlook: Outline 2
  3. 3. Understanding the Symbols 3 Upward market pressure Flat market pressure Downward market pressure
  4. 4. Market Pressure Points 2014 4
  5. 5. Last Summer 2013 ACTUAL This Summer 2014 FORECAST Actual season: 6% cooler than 2012 5% warmer than 30-year average 1,293 Cooling degree days 1% warmer than last year 6% warmer than 30-year average Summer-to-summer pressure on natural gas prices 5 Source: NOAA forecast map, May 2014 1,306 Cooling degree days Weather Demand: Summer SeasonData source: NOAA, EVA
  6. 6. 6 Summer Season Last Summer Period-to-period change 2013 Data source: IHS Global Insight ACTUAL Summer 2014 FORECAST Economy Fell short of expectations Expanding GDP growth 1.8% 2.4% Unemployment rate 7.4% 6.5% Manufacturing 2.4% 3.6% CPI 1.5% 2.0% Consumer Sentiment Index 81.6 86.5 Summer-to-summer pressure on natural gas prices Pressure Point: Economy/Demand
  7. 7. 7 Summer Season Last Summer Period-to-period change 2013 Data source: U.S. Energy Information Administration; EVA ACTUAL Summer 2014 FORECAST Total Demand  Industrial demand  Electric demand  Residential/commercial 60.2 Bcf/d 19.4 Bcf/d 23.8 Bcf/d 11.4 Bcf/d 60.4 Bcf/d 20.3 Bcf/d 23.1 Bcf/d 11.4 Bcf/d Change from previous year +0.3% Growth sector Residential/ Commercial Industrial Summer-to-summer pressure on natural gas prices Overall Gas Demand/Consumption
  8. 8. 8 Note: 2010, 2011 and 2012 denote very hot summers. Coal-to-gas switching in 2014 is forecasted. Source: EVA, May 2014 Portion of Electric Demand Attributable to Coal-to-Gas Switching Follows Price
  9. 9. 9 Source: Energy Ventures Analysis, Outlook for Natural Gas Demand for the Summer of 2014, Exhibit 14 “New U.S. Generation Capacity” Steady Growth in New Natural Gas-fired Generation Capacity 2010-2015
  10. 10. 10 Total = 4.7 BCF/DAY Majority of Industrial Growth Occurs in Fertilizer, Gas-to-Liquids Sectors Growth by industrial application 2010-2019 Source: Energy Ventures Analysis, 2014
  11. 11. 11 Storage/Demand Summer Season Period-to-period change Data source: EIA, EVA Last Summer 2013 ACTUAL Summer 2014 FORECAST Season starting point (billion cubic feet) 1,687 Bcf 826 Bcf Average weekly injections 68 Bcf 83 Bcf projected End-of injection season 3,816 Bcf 3,400 Bcf projected Summer-to-summer pressure on natural gas prices
  12. 12. 12 Note: 2014 is estimated. Source: EIA and EVA, 2014 Storage Injections 2003-2014 Record-breaking Storage Injections Projected
  13. 13. 13 Source: EIA and EVA, 2014 Total = 4.4 Tcf Two-thirds of Storage Near Consumers Producing Region Characterized by Flexible Salt Dome Storage
  14. 14. 14 Summer Season Period-to-period change Data source: EIA, EVA Last Summer 2013 ACTUAL Summer 2014 FORECAST Summer average production 66.6 Bcf/d 68.5 Bcf/d Canadian imports (net) 5.0 Bcf/d 5.0 Bcf/d LNG imports 0.3 Bcf/d 0.3 Bcf/d Mexican exports -1.8 Bcf/d -1.9 Bcf/d Summer-to-summer pressure on natural gas prices Production/Supply
  15. 15. 15 Summer Outlook: Wild Cards  Hot summer could increase electric demand  End to California drought /mild summer could decrease electric demand  Very active hurricane/storm season
  16. 16. 16 Summer Season Period-to-period change This Summer 2014 FORECAST Weather Economy Overall demand Storage Overall supply Summer 2013-to-summer 2014 Pressure on natural gas prices This Season’s Summer Outlook
  17. 17. 17 Summary  Increase in natural gas supplies supporting continued industrial and electric growth  Natural gas serving demand and storage needs at record pace  Fuel switching persists for sixth straight summer -- but retreats to 2010 levels
  18. 18. Summer Outlook Cooling Season 2014 18 NGSA Staff Contact: Daphne Magnuson dmagnuson@ngsa.org

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