Henry Hub Outlook

BTU Analytics’ Henry Hub Outlook provides a fundamentally driven view on market dynamics influencing Henry Hub pricing. BTU Analytics uses a bottoms-up approach of building our forward view on Henry Hub pricing dynamics where we bring together our current and forward views on supply, demand, infrastructure, and implied storage balances which guide our forecast of Henry Hub pricing levels on a monthly basis over the next five years.

The Henry Hub Outlook leverages many of BTU Analytics’ models including our well-level economics model, E&P cash flow model, and infrastructure development and expected pipeline utilization model to give you a fundamental view of Henry Hub pricing while also clearly outlining the risks to the analysis.

 

Dedicated coverage includes:

    • Natural Gas Henry Hub Futures curve vs. BTU Analytics’ Henry Hub price forecast highlighting drivers for natural gas prices and when and why differences exist between futures market pricing and BTU Analytics’ outlook for natural gas prices
    • Forward 5-year view on storage balance detailing where and when the storage equilibrium tilts towards surplus or deficit
    • Supply view by region informed by BTU Analytics’ well-level economics model which drives BTU’s view on US dry gas and associated gas production including a historical time series, projected decline of existing wells (PDP), a projection and forecast of current rig activity, and BTU Analytics’ forecast of total natural gas production over the next 5 years
    • Natural gas demand view by sector in aggregate as well as by demand component with dedicated coverage for:
      • Natural gas power burn by region with analysis on power plant retirements, power plant additions, plant utilization by fuel type and impact of wind and solar development on gas burn
      • Industrial, residential, and commercial demand forecasts and the drivers for increasing or decreasing consumption by region
      • LNG exports with terminal in-service dates and projected export terminal utilization with 5-year volume forecasts by export terminal
      • Mexican export forecast by corridor with expectations of Mexican power plant development and analysis of new Mexican natural gas export pipeline projects
    • Current and forecasted regional natural gas balances based on natural gas supply and natural gas demand over the next 5 years for 11 US natural gas regions including Appalachia, Atlantic Seaboard, New England, Southeast, Louisiana, Texas, Midcontinent, Midwest, Rockies, Southwest, and Pacific Northwest
    • Analysis of natural gas dynamics across Texas including production, demand by type and demand by Texas sub-regions.  Permian regional balances are also provided highlighting production levels, West Texas demand, Mexico exports and estimated eastbound flows across the Texas intrastate pipeline system
    • Analysis of natural gas pipeline flow dynamics into and around the Henry Hub and Louisiana. In addition to inbound and outbound flows from Louisiana, BTU Analytics provides an overview of Louisiana demand, Louisiana production from the Haynesville / Cotton Valley and other on and offshore plays and how that supply and demand is positioned relative to flows from Carthage to Perryville, Houston Ship Channel to Henry Hub, flows from Appalachia to Perryville as well as outbound flows to the Southeast and Atlantic Seaboard markets

Author: Mason Ender

Mason Ender is a partner at BTU Analytics, LLC and managing director of business development overseeing client relations, marketing, and sales. Prior to joining BTU Analytics, he was the Manager of Sales for Bentek Energy, a division of Platts. Mason has worked with energy companies both domestically and internationally to implement effective fundamental energy analytic solutions. Mason also routinely presents energy market dynamics informing the market of upcoming risks and opportunities.