Gas for delivery this year and the next is trading at a steep premium to contracts further in the future, a condition known as backwardation. The last time the forward curve looked this way in the fall was a decade ago, when supply disruptions from hurricanes sent gas prices soaring in the era before the shale revolution unleashed a production boom.
… unusual volatility in the gas market for the next year as rising exports and diminishing output from shale basins stoke concern that output won’t be enough to prevent price shocks in the winter, the peak season for heating demand. Backwardation emerged in June and has become more pronounced after government estimates showed U.S. gas supply will drop in 2016 for the first time in 11 years, according to Bloomberg.com.
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