Is The Nat Gas Market Set to Enter A Golden Age?

Katie Bays of Height Securities said 2017 may be a turning point for
LNG markets
as buyers - who have sat on the sidelines for several years and refrained from signing new contracts with LNG export terminals - begin to change their tune.

“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.

Related Link: 5 Attractive Stocks Trading At A Reasonable Price

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Posted In: Analyst ColorNewsCommoditiesMarketsAnalyst RatingsHeight SecuritiesKatie Bays
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