"Natural gas is expected to make up a larger share of total U.S. electricity generation than coal for the first time ever. The shuttering of coal plants and the construction of new natural gas plants will lock in gas demand for years – and likely, decades – to come.........The recent OPEC deal complicates this picture. Before the deal to cut output, oil prices were expected to remain more or less where they are – the EIA projected WTI to average just under $50 per barrel through 2017. But the sharp increases in prices in recent days, and the prospect of further gains for crude in the months ahead, likely means that shale drillers will rush back to work. That will probably lead to a rebound in oil production sooner rather than later – and a likely side effect of that will be a rise in natural gas production.
“These guys will drill more, and you are going to get that extra gas at an inconvenient time,” Jason Schenker, president of Prestige Economics LLC, told Bloomberg in an interview. “It’s bearish for U.S. gas for the next three- to nine-month window.”
That remains to be seen. In the short run, due to a tightening of supply and demand, we could see natural gas prices consistently trading north of $3/MMBtu for the first time in more than two years."
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Great for GE but also Capstone. More gas demand equates to more drilling and infrastructure expansion which will bode well for Capstone.
AI
