Natural gas prices are coming under pressure again, ahead of a flood of supply expected to reach the market at the end of the month.
The UAE may be facing a shortage of cheap, readily available gas, but globally, natural gas prices are being squeezed by oversupply.
Barclays Capital said the market could be flooded with excess product at a time when demand for gas for heating is diminishing as the northern winter wanes.
With the weather in the United States this month expected to stay unseasonably warm, the excess gas would need to find a home by undercutting coal, suggesting the gas market would need to balance at even lower prices.
Another knock-on effect, if storage operators are not disciplined enough to enforce contracts for gas to be withdrawn, is that gas stock rebuilding would begin while current levels are already high. Storage is already at 57 per cent of capacity, according to Barclays Capital.
"This outcome will likely put tremendous pressure on the rest of the contracts in 2012, especially the October contract, as the market fears even normal weather in the summer could mean that the market is on track to end October with storage beyond capacity," the bank's analysts said in a note.
Production data shows the pace of supply growth has not slowed. As a result, natural gas futures at the Henry Hub, the benchmark US pricing point and delivery point for New York Mercantile Exchange Index, were down 0.99 per cent yesterday to US$2.30 per million British thermal units, the biggest fall in a week. This is down from $3.084 at the start of the year.
Still, few producers forecast outright production declines for the year. On the demand side, the macro backdrop in the US continues to improve.
But for now, natural gas looks set to take a back seat in investors' portfolios.
lmiller@thenational.ae
twitter: Follow our breaking business news and retweet to your followers. Follow us
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The specs: 2018 Harley-Davidson Fat Boy
Price, base / as tested Dh97,600
Engine 1,745cc Milwaukee-Eight v-twin engine
Transmission Six-speed gearbox
Power 78hp @ 5,250rpm
Torque 145Nm @ 3,000rpm
Fuel economy, combined 5.0L / 100km (estimate)
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
States of Passion by Nihad Sirees,
Pushkin Press
Sanju
Produced: Vidhu Vinod Chopra, Rajkumar Hirani
Director: Rajkumar Hirani
Cast: Ranbir Kapoor, Vicky Kaushal, Paresh Rawal, Anushka Sharma, Manish’s Koirala, Dia Mirza, Sonam Kapoor, Jim Sarbh, Boman Irani
Rating: 3.5 stars
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
