AFPM '12: US natural gas price too low to sustain production

02 April 2012 18:25  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--US natural gas prices would have to rise to sustain domestic output of the commodity in coming years, a consultant said on Monday.

The May futures contract for Henry Hub natural gas closed at $2.126/MMBtu on Friday, down 2.3 cents from Thursday and capping a month of historically low values as storage levels remain at an all-time high and demand has waned with spring temperatures.

"I would not get used to $2 as the long-term price," said Bob Ineson, IHS CERA's senior director for global gas. "It's going to have to come up."

Ineson noted that US gas in storage is already well above the five-year average, which itself is higher that historical norms because of the swelling production of non-conventional gas, including from shale deposits.

In comments to a session of the International Petrochemical Conference (IPC), Ineson did not make a specific prediction for long-term natural gas prices.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.


By: Stephen Burns
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