Three natural gas trends to watch in 2016

摘要

Nov. 23—Several potential shifts in natural gas market dynamics could have an impact on end users in the next year. Market participants have gotten used to a well-supplied situation and generally low pricing, but three issues are indicative of a changing market over the next 12 months and beyond. They include flat to falling domestic production, growing demand from power generators and the continued exports ramp up. Natural gas producers in the U.S. sent volumes to market at a record clip in 2015, but the rapid growth of 2014 has halted. The combination of low prices and limited levels of exploration could set 2016 up to be a flat production year or even the first annual decline since the middle of last decade. This is a factor that could come as a shock to the system as market participants have gotten used to reliable year-over-year supply growth.