Winter May Yet Rescue Gas Prices From Careening Toward Meltdown

摘要

A price meltdown may not be in the cards this year, as postulated by FirstEnergy analyst Martin King (NGW Jan.19'15), but there is still a bearish inevitability to the market even under the most bullishly optimistic scenarios. In its 2015 outlook last week, BNP Paribas took down its gas price forecast for the year from $3.60 to $3.30 — well above FirstEnergy's $2.63MMBtu outlook but for much the same reasons. First off, the lightest December gas demand in three decades can't be ignored. "This development certainly raises the odds of saturating storage capacity next summer," said BNP Paribas analyst Teri Viswanath. 'Yet, the colder weather pattern unfolding this month suggests that there still might be some time for the industry to sufficiently pare inventory levels by the end of the season to buffer against undue price weakness."