LNG Exports Helpful, but No Panacea for Gas
Thanks to a subscriber for this informative report by Hussein Allidina and colleagues at Morgan Stanley covering the economics of US natural gas exports. Here is a section:
The abundance of energy resources and particularly gas lend the USA a significant advantage in energy cost management. It is only a matter of time before the US begins to export natural gas but even then it will be years before significant export capacity will be completed.
At present the US market is labouring under a supply surfeit which is slowly being chipped away by increased demand and the shuttering of uneconomic supply. $4 represents a psychological Rubicon for the market since so much more supply becomes profitable at that level. Meanwhile prices continue to hold a progression of higher reaction lows and a sustained move below $3.35 would be required to question current scope for continued higher to lateral ranging.