Displaying items by tag: natural gas

U.S. House of Representatives push back on one of President Biden’s most recent energy initiatives, pausing approvals for liquified-natural-gas exports. The GOPs bill passed on a measure of 224 to 200 in the House and a similar bill making its way to the Senate. 

Biden’s pause on LNG-exports sent shockwaves through the energy markets last month as prices plummeted to the lowest point in nearly four years. 

The halt of LNG exports was praised by climate activists and was seen as a pivotal step by the current administration in dealing with one of the more pressing issues of our times, but conservatives fear this initiative puts a restriction the U.S. ability to generate jobs in this area. Moreover, countries like Russia could step in to fill the void in production. It was only a year ago Biden was pleading with European countries to decrease their reliance on Russian natural gas production. 

The final piece of this puzzle is the legislation would limit the ability of the Department of Energy to regulate and control LNG, and Democrats have made the plea that if this bill was enacted it would increase prices for consumers.

Finsum: Declining natural gas prices could also be affected by this year’s historically warmer temperatures mitigating the need for typical winter consumption. 

(Houston)

When you think of oil, you don’t normally think of an industry that would gain from a big win by Democrats in an election. But as it happens, oil could very well gain if Democrats sweep the presidency and congress. The reason why is slightly perverse, but that makes it no less relevant. The concept is that Democrats would be bring new regulation around fracking; specifically, regulations that limit new drilling but allow existing projects. What this would mean is a steady rise in prices as inventory becomes constrained as the recovery proceeds. For example, Morgan Stanley is forecasting almost a 100% gain in natural gas prices next year.

FINSUM: Oil and gas are a physical supply and demand market, and if regulations keep supply in the ground, then prices will rise.