Gas Awakening From U.S. Shale Slumber as LNG Shipments Near – Bloomberg Business

After years of languishing in a shale-induced coma, the U.S. natural gas market is waking up.Seasonal price swings will intensify as the country begins shipping liquefied natural gas cargoes to Asia and Europe later this year, said Bank of America Corp., RBC Capital Markets LLC and Wood Mackenzie Ltd. While that’s good news for traders yearning for volatility, it could be bad news for consumers.Exports will help prices rebound from the slump caused by the U.S. pumping record amounts from shale formations. Growing domestic winter demand is already causing spikes and trading volumes in futures markets have rebounded to the highest level in three years. Average retail gas prices also will rise with LNG exports, according to Bloomberg New Energy Finance.“Connecting U.S. natural gas prices into the global market could result in wider spreads at home,” said Francisco Blanch, the head of commodities research at Bank of America Corp. in New York. “Global LNG spot prices are notoriously seasonal.”Cheniere Energy Inc. will start operating a liquefied natural gas terminal this year in Louisiana, the first new export site in 46 years. The U.S. will be the third-largest supplier by 2020, the International Energy Agency says.In a sign of what may be coming, futures for January 2017 are already trading at a 37.2-cent premium to October 2016 contracts, the biggest premium for this time of the year since 2012. That seasonal spread may widen to as much as a dollar as LNG exports expand, Blanch said.

via Gas Awakening From U.S. Shale Slumber as LNG Shipments Near – Bloomberg Business.

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