HOUSTON: U.S. natural gas prices will stabilize next year as cost-cutting efforts by producers are proving profitable, a U.S. leading energy investment bank forecasted Wednesday.
"We are finally seeing green shoots -- or positive economic signs -- from capital cuts that should ultimately help stabilize gas prices in 2020," said the Houston-based investment bank Tudor Pickering Holt & Co. in a report."The outlook is still far from bullish, but we think equities could finally start to find a bottom," wrote Katherine Webb, the bank's energy analyst.
When the share prices, or equities, of leading oil and natural gas producers actually do settle down, corporate cash on hand will be more stable and consistent. But these companies should not ramp up significant new spending plans in 2020 and 2021, said Webb, reports Xinhua.
She said that strong "near term headwinds" still face the energy industry, which could also impact energy prices in general. Such short-term factors include the fears of a global economic downturn, according to experts.
"I think it is clear that Trump's trade war with China has succeeded mainly in slowing the global economy and boosting fears of a recession," said Joe Romm, the head of publication of think-tank Think Progress. "That has added to already existing fears," he told Xinhua.
U.S. natural gas spot price on Wednesday was between 1.82 and 2.08 U.S. dollars per cubic foot, according to the Energy Information Administration (EIA).
Prices of natural gas for export and for domestic consumption fell in the week from July 31 to Aug. 7, according to the EIA.