After a two-year reprieve from a nearly decade-long period of severe pipeline constraints and debilitating prices, Northeast natural gas producers are again headed for a constraint-driven market in the next five years. Appalachian supply prices last year weakened relative to national benchmark Henry Hub, reversing the gains of the past few years, and fell to historic lows as oversupply conditions prevailed and at times strained available takeaway capacity. All that despite the rig count hitting a four-year low and shale producers’ best — even unprecedented — efforts to respond to low prices with short-term production cutbacks during the shoulder seasons. So what happens when rig counts and production recover in the coming years? How long before pipeline constraints worsen and what are the prospects for new pipeline development? Today, we begin a blog series detailing recent supply-demand trends in the region and our outlook for 2021 and beyond.
Headed for Heartbreak – The Northeast Gas Market’s Slow March Toward More Takeaway Constraints
