Energy Report: Risks Are Evolving

EBW Analytics reported that strong fundamentals, however, are likely to support renewed gains for natural gas as winter approaches. A return to last week’s highs—or beyond—remains likely into early winter. The restoration of 120,000 barrels/day of shut-in Gulf of Mexico output over the weekend may lead to a brief stumble early this week, but upward momentum and supportive fundamentals are likely to yield renewed gains in the near-to-medium term.

Even though natural gas is pulling back I think if you read what the stories are saying, there's still a significant upside risk for prices this winter. It is unlikely that the United States will put an outright ban on natural gas but it's kind of ironic because Europe is now really depending on the U.S. and our production to bail them out. Russia already has been playing games with Europe as far as supply and trying to use the shortage to gain political leverage with their Nord Stream pipeline. Russia is not a reliable supplier because when it suits their political interest, they will cut off supply.

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