Analysis - Page 9

With the first deliveries of Liquefied Natural Gas (LNG) from the US, let’s take a look at the fast changing energy landscape

Posted in Analysis, Energy Transition on

US shale gas: the first of five revolutions at the beginning of the XXI century

Three revolutions on the supply side: US shale gas, US shale oil and worldwide renewable

The US shale gas revolution is only the first (and most documented) of three revolutions that happened since the beginning of this century on the supply side. The world has changed thanks to the US shale revolutions (gas first and then oil) and a global quest for renewable. Those revolutions took over a decade but will shape the XXI century. Australia followed producing unconventional gas and is now also exporting it. It should take some time for unconventional oil and gas production to materialize in other places where the resource is available[1] (Argentina, Canada, China, Mexico, Russia, South Africa, etc.) but the US shale revolutions should be exported in a few other countries.

2015: A Third Year of Moderate Growth in Gas Demand

Posted in Analysis, Natural Gas Market, Natural Gas Statistics, Press release on

Natural gas demand grew by 1.6% in 2015 according to Cedigaz after having stagnated in 2014. However, this apparent, if modest, resumption of global gas market growth can be misleading as the higher growth rate is essentially the result of a weather driven recovery in the EU where demand rebounded by 4.5% after having dropped by 11% in 2014. For the rest of the world gas demand growth was actually lower than in 2014 (1.2% vs. 2%) and was pulled by a limited number of countries led by the US. The inability of natural gas demand to keep pace with an accelerated supply growth, led to an imbalance in the global gas market and to a price weakness which is expected to continue in the short and medium-term, amid a sluggish economic environment.

The year 2015 saw considerable changes in macroeconomic and price factors. Economic growth stood at 3.1%, lower than at any time since 2012 (3.3/3.4%) and also lower than the 10‐year trend (3.8%). This was the result of the relatively modest growth of the emerging countries (4% compared with 6% over ten years), although western countries’ growth rate exceeded the 10‐year average (1.9% compared to 1.5%).  International crude oil prices fluctuated to new lows, with Brent averaging 52/bl, down by 47% from the previous year.

Storm warning in the U.S. oil & gas sector

Posted in Analysis, Country Report, Natural Gas Market, Press release on

The new CEDIGAZ report, U.S. Natural Gas Update and Outlook*, analyzes the consequences of the oil price decline on the U.S. oil and gas sector as well as the implications for production and hydrocarbon prices.

The oil price decline has left American producers in a situation like that of 2009 following the collapse of the Henry Hub gas prices. At the time, shale gas production was growing fast but demand was depressed due to the effects of the subprime mortgage crisis. Producers reacted by redirecting their investments towards liquid-rich deposits (containing oil or natural gas liquids) and were thus able to benefit from the oil price recovery. This strategic reorientation did not penalize gas production, which continued to grow, thanks to the gases associated with oil production which, in recent years, have been responsible for almost all growth in gas production. Today, more than 50% of the shale gas produced in the United States comes from liquid-rich deposits. Consequently, any decrease in liquids production occurring in reaction to falling oil prices is bound to have major repercussions on domestic gas production.