“U.S. gas production remains robust and prices are low, bolstering confidence that Henry Hub-linked contracts can offer long-term savings relative to their oil-linked peers,” Bays wrote in a note.
Which Companies Will Benefit
Bays said the momentum would boost fortunes for projects like Cheniere Energy, Inc. LNG’s Corpus Christi, Liquefied Natural Gas Ltd LNG’s Magnolia, and Tellurian Inc TELL’s Driftwood LNG project, among others.
Yuji Kakimi, president of JERA Co, the largest LNG buyer in the world, sees long-term growth in LNG demand keeping pace with projections (5-6 percent annualized) but predicts prices remaining below $10/MMBtu. U.S. export terminals are among the only proposed projects that can conceivably profit at $10/MMBtu.
At last check, shares of:
United States Natural Gas Fund, LP UNG rose 2.55 percent to $7.03.
VelocityShares 3x Long Natural Gas ETN UGAZ advanced 7.64 percent to $17.19.
VelocityShares 3X Inverse Natural Gas ETN DGAZ fell 7.75 percent to $5.36.
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