Another great quarterly report from the Goehring & Rozencwajg firm - this time pointing out that natural gas production actually fell this year. Against this my morning coffee headline scan shows Energy Transfer saying they have requests to connect 16 bcf/d of new gas demand for data centers and so forth, and Targa forecasting a 20 bcf/d increase in US gas demand by 2030. So if you use Targa's outlook, a 20% increase in demand in 5 years on the back of falling supply and negative prices this year. And Targa is forcasting only 7 bcf/d or so of this can come from the Permian.

Either the laws of how prices work when demand is higher than supply have been repealed this year or we're in for a very exciting last half of the decade. I'm bullish nat gas for sure. But what is good news for gas has historically not been so great for everyone else. What I do know, is that the term data driven is meaningless - if we don't like the "data" we just change it, ignore it, or argue that it's wrong. Each to his or her own viewpoint - I believe people who have their own money in the game. E&P is being handed a tremendous supply opportunity - but they have some catchin' up to do to get that growth engine moving again.

And yes, I got gold. Everything I read about what's coming up next year says "inflation". Creating a new Department on top of all the other Departments to cut spending doesn't exactly scream budget cuts to me. And no, I don't think that the alternative would have changed the view that we're trying hard to replace Argentina as the poster child for inflation. Many of us are old enough to have seen this movie before. Mike's right - time to go fishing.

https://www.gorozen.com/commentaries/2q2024