The Scoop – (See Chart Below) Hard to believe, but this winter looks to be another mild one for most of the nation. This weather pattern is due to a weak La Nina or slight cooling of the Northern Pacific ocean temperatures. If this comes to fruition, pricing should stay steady. Since pricing has remained low, note that drilling rig count has continued to drop and storage is now below 5-year averages.
Strategy Advice – The EIA raised its price projections for ’18. Consumption growth prediction is 1.8% higher than ’17 mostly due to a colder winter assumption. Also, contribution to the rise in prices is the growth in LNG exports due to Cove Point Maryland facility & Cheniere’s Sabine Pass 4th train being fully operational. Once operational, the US will become 3rd largest exporter of LNG in the world only toAustralia & Qatar.