US natural gas price outlook

摘要

Speaking at Wood Mackenzie's recent Houston Energy Forum,Jen Snyder,-Head of Wood Mackenzie North American Gas Research,presented the company's new-lower than previous estimates and current market view-US natural gas price outlook,warning of a prolonged period of significant weakness.Snyder stated:'We expect US natural gas prices to trade in the range of 5/mn Btu to 6/mn Btu for the next five years.We are now in a position of significant potential over-supply brought about by the huge success experienced in the development of shale gas plays.Whilst most commentators are pointing towards prices settling at the marginal cost of the most expensive shale plays,we think this is a mistaken reading of the current and future environment.Simply stated,there is no requirement for the rapid near to midterm development of some of the more expensive or challenging shales such as the Marcellus or Horn River;the market can be adequately supplied without these volumes.We believe that there are sufficient volumes available at a development break-even price of 5.50/mn Btu or below for the market to balance.'