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energies

Goldman Sachs says shale boom driving fear out of futures

Rising U.S. shale gas production is driving fear out of the futures market, says Goldman Sachs Group Inc., and will constrain prices for the next two decades.

Gone will be the near tripling of costs to $15.78 as in 2005 as traders remain confident the fuel will be there when needed. Natural gas will trade largely at $4 to $5 per million British thermal units for the next 20 years, says Goldman Sachs.

Societe Generale SA sees prices at $5 through 2019. Bank of America Corp. forecasts $5.50 for 2017, while BlackRock Inc. projects $4 to $5 for the next decade.

Prices were four times more volatile in 2009 than they are today as production grows for the ninth straight year and new pipelines deliver the fuel to customers.

Gas for use next winter costs 3.2 percent more than now, the smallest premium for the peak-demand period since 2000. Stockpiles will start the heating season at the lowest levels since 2008.

"The market is rightfully not that worried because you have so much supply that is coming online," said Jeffrey Currie, head of commodities research at Goldman Sachs in New York.

The U.S. Energy Information Administration forecasts natural gas prices will average below $5 through 2023 and less than $6 until 2030.

Bloomberg News

energies-w2w

  • Department of Energy Weekly Report (Wednesdays 10:30am est)
  • American Petroleum Institute Weekly Report (Wednesdays 10:30am Est)
  • Natural Gas Inventories Weekly Report (Thursdays 10:30am est)
  • OPEC Production Quotas
  • OPEC Monthly Oil Market Report
  • Non-OPEC Oil Production
  • Mideast Stability
  • Weather- Related demand
  • CFTC Commitment of Traders Report
  • Energy Information Administration Report (Tuesday afternoons)
  • International Energy Agency Policy
  • Chinese (Asian) demand
  • Iraqi production and export levels
  • Russian shale production
  • Alternation Energy production and technological breakthroughs
  • Inflation
  • Dollar weakness and purchasing power
  • Refining Capacity
  • Weather related refining production limitations (eg hurricanes in the gulf)
  • Venezuelan Production
  • Venezuelan Foreign Policy in relation with US
  • Iran Nuclear dispute status
  • US Strategic Petroleum Reserves
  • US New Drilling and Exploratory Initiatives
  • Oil Spills
  • International Energy Agency Reserves
  • General Accountability Office Study on Geopolitical Disruptions
  • International and Domestic Tax rates relating to oil and gasoline
  • New Geopolitical order after Arab Spring

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