What Lies Ahead for 2017?

December 29th, 2016 |

As 2016 comes to a close, we are ramping preparations for our annual conference in Houston on February 8, 2017. As part of that preparation, it seems only fair to look at some of key takeaways from our 2016 What Lies Ahead Conference.

At our 2016 conference, we covered 5 major themes:

  • North Americas’ Role in the Global Energy Market
  • Northeast Natural Gas Market Outlook
  • Well Economics, Capital Budget Allocation, and Impacts to Production
  • Midstream Opportunities and Risks
  • Where the Natural Gas and Crude Oil Markets go from Here

One of the major takeaways from our conference in February of 2016 was that low oil prices would lead to a strong rebound in natural gas prices in the second half of 2016 and that how the winter shaped out would determine just how high 2017 prices would run. We’ve done pretty well on both accounts. On the crude side we expected 2016 WTI prices to average $39.36 and as of today 2016 prices have averaged $43.21. The OPEC driven rallies in October and December have helped pull the average higher than our original expectations for the year, but have also gotten us closer to our original December target of $49.20 compared to an average of $51.89 for December month to date. The graph below shows our WTI forecast highlight at our What Lies Ahead Conference.

On the natural gas side the rally has continued to play out as expected. A warm November did mute the overall rally this year but a cold December has helped set things up better for 2017. Operators are ramping up in the Haynesville to try to squash any long term price recovery, but the fact that our outlook on pipeline delays continues to be the norm rather then the exception will continue to help buoy prices. During 2016, multiple projects pushed back expected in-service dates including Atlantic Sunrise and Atlantic Coast Pipeline, while it is becoming increasingly likely that Rover will miss the winter tree cutting window and face up to a year long delay in 2018.

Our 2017 conference (Full Agenda Here) is shaping up to have lots to talk about this year with OPEC Cuts, drilling rigs seeing double digit gains each week, continued structural demand growth for natural gas, and a new administration potentially altering the process for pipeline reviews.

With only a few days left to sign up for our 2017 What Lies Ahead Conference on a discounted basis make sure to get your seat. We look forward to another interesting year for North American and global energy markets.

Happy New Year from BTU Analytics!

Author: Tony Scott

Anthony (Tony) Scott has built an in depth understanding of the North American energy market by providing investment advisory services and leading teams of analysts focused on the North American energy complex. Mr. Scott has conducted hundreds of consulting engagements assisting producers, marketers, midstream, refiners and private equity understand how rapidly changing natural gas, natural gas liquids, and crude oil markets in North America would impact their assets.