raymond james gas price forecast for 2001 note : raymond james and associates is predicting gas prices to average $ 4 . 50
in 2001 . consensus first call estimates
are now averaging $ 3 . 85 for 2001 . read on to hear what the brokerage houses
are predicting . lorna
raymond james sends chills up gas buyers ' spines
raymond james and associates gave gas buyers a halloween shriek yesterday
that could be producing chills all the way through next april , perhaps even
all of next year . the firm released a chilly forecast of double digit gas
prices this winter and said it expects prices to average $ 4 . 50 / mmbtu in 2001 .
" regardless of a potentially warm winter , it is highly likely that the united
states will experience regional shortfalls in gas supply , " raymond james said
in its latest energy report . " in other words , gas storage should test
all - time low levels this winter regardless of weather .
" the situation should get worse , not better , next year . if we end the winter
at all - time low storage levels and we cannot inject more gas next summer than
we did this summer , then we should enter next winter with dangerously low
levels of natural gas , " raymond james added .
" we believe that the united states will see gas demand increase by about 9
bcf / d ( or 15 % ) by the end of 2002 as new gas fired electric generation plants
come on line . unfortunately , even if every drilling rig is working , u . s . gas
supply is likely to increase by less than 4 bcf / d by the end of 2002 . this
means that gas prices must rise sufficiently to crimp over 5 bcf / d of demand
out of the gas supply / demand equation by 2002 . at $ 5 / mcf , only about 1 . 5
bcf / d of demand has been reduced so far . that means that gas prices must go
higher over the next several years . "
however , raymond james ' bullish predictions are a far cry above the crowd on
wall street . plenty of other analysts have upped their forecasts recently to
hair - raising levels . the first call consensus for 2001 now is up to
$ 3 . 85 / mmbtu . but that ' s still 65 cents less than the raymond james ' s
prediction .
not everyone wants to scare the daylights out of buyers , however . deutsche
bank believes analysts and the futures market participants at nymex " are
getting bold and in our view maybe too bold . "
" with the natural gas rig count approaching 850 , it is hard to believe that
there will not be a fairly substantial supply response in 2001 , " deutsche
bank said in its energy wire on friday . " analysts at the u . s . energy
information administration are expecting dry gas production to rise to 18 . 94
tcf ( 51 . 9 bcf / d ) in 2001 , after being stuck at near 18 . 7 tcf ( 51 . 2 bcf / d ) for
several years . our own estimate for 2001 looks for 19 . 1 tcf ( 52 . 3 bcf / d ) and
we have seen credible forecasts reaching as high as 19 . 7 tcf ( 54 bcf / d ) . in
general we think the eia is way too conservative and that our own number is
more likely to be adjusted higher rather than lower . a gain in domestic
production of 2 bcf / d to 53 . 2 bcf / d could be doable . imports appear likely to
be up 0 . 5 bcf / d . if demand rises by 2 . 5 % , that would account for about a 1 . 5
bcf / d gain . all other things equal , this implies that storage can refill and
suggests that prices are going to come under some downward pressure . "
- -
raymond james gas price forecast for 2001
note : raymond james and associates is predicting gas prices to average $ 4 . 50
in 2001 . consensus first call estimates
are now averaging $ 3 . 85 for 2001 . read on to hear what the brokerage houses
are predicting . lorna
raymond james sends chills up gas buyers ' spines
raymond james and associates gave gas buyers a halloween shriek yesterday
that could be producing chills all the way through next april , perhaps even
all of next year . the firm released a chilly forecast of double digit gas
prices this winter and said it expects prices to average $ 4 . 50 / mmbtu in 2001 .
" regardless of a potentially warm winter , it is highly likely that the united
states will experience regional shortfalls in gas supply , " raymond james said
in its latest energy report . " in other words , gas storage should test
all - time low levels this winter regardless of weather .
" the situation should get worse , not better , next year . if we end the winter
at all - time low storage levels and we cannot inject more gas next summer than
we did this summer , then we should enter next winter with dangerously low
levels of natural gas , " raymond james added .
" we believe that the united states will see gas demand increase by about 9
bcf / d ( or 15 % ) by the end of 2002 as new gas fired electric generation plants
come on line . unfortunately , even if every drilling rig is working , u . s . gas
supply is likely to increase by less than 4 bcf / d by the end of 2002 . this
means that gas prices must rise sufficiently to crimp over 5 bcf / d of demand
out of the gas supply / demand equation by 2002 . at $ 5 / mcf , only about 1 . 5
bcf / d of demand has been reduced so far . that means that gas prices must go
higher over the next several years . "
however , raymond james ' bullish predictions are a far cry above the crowd on
wall street . plenty of other analysts have upped their forecasts recently to
hair - raising levels . the first call consensus for 2001 now is up to
$ 3 . 85 / mmbtu . but that ' s still 65 cents less than the raymond james ' s
prediction .
not everyone wants to scare the daylights out of buyers , however . deutsche
bank believes analysts and the futures market participants at nymex " are
getting bold and in our view maybe too bold . "
" with the natural gas rig count approaching 850 , it is hard to believe that
there will not be a fairly substantial supply response in 2001 , " deutsche
bank said in its energy wire on friday . " analysts at the u . s . energy
information administration are expecting dry gas production to rise to 18 . 94
tcf ( 51 . 9 bcf / d ) in 2001 , after being stuck at near 18 . 7 tcf ( 51 . 2 bcf / d ) for
several years . our own estimate for 2001 looks for 19 . 1 tcf ( 52 . 3 bcf / d ) and
we have seen credible forecasts reaching as high as 19 . 7 tcf ( 54 bcf / d ) . in
general we think the eia is way too conservative and that our own number is
more likely to be adjusted higher rather than lower . a gain in domestic
production of 2 bcf / d to 53 . 2 bcf / d could be doable . imports appear likely to
be up 0 . 5 bcf / d . if demand rises by 2 . 5 % , that would account for about a 1 . 5
bcf / d gain . all other things equal , this implies that storage can refill and
suggests that prices are going to come under some downward pressure . "
- -