"Industrial Demand For Gas In Europe Will Never Go Back To Pre-Energy Crisis Levels" With Samantha Dart, Goldman Sachs

C.O.B. Tuesday

Today we had the pleasure of hosting Samantha Dart, Head of Global Natural Gas Research at Goldman Sachs. Samantha first joined Goldman Sachs in 2006 as an energy strategist and returned to the firm in 2018. Between her tenures at Goldman Sachs, she served as Global Head of Gas and Power Research at Noble Group and as Head of Gas & Power Research at Mercuria Energy America. Samantha specializes in global natural gas fundamentals research and marketing and holds a PhD in Economics from the University of Chicago. We were thrilled to hear Samantha’s unique insights on the latest developments in the US and European natural gas and LNG markets.
In our conversation, Samantha shares her perspective on how she sees global gas markets evolving, the potential risks and opportunities for US natural gas producers given the expected increase in global LNG capacity, and an expected significant LNG capacity jump beginning in 2026. We explore the future price of US natural gas in 2030, how power demand from LNG expansion, data centers, and other needs will grow demand, how production growth might change locations and of course influence prices, as well as what risks she sees to an otherwise relatively stable $4 to $5 mmbtu long-term outlook. We discuss the potential price impacts of increased production and capacity, how bottlenecks could drive prices up, the role that Asia and Europe will play in absorbing the increased LNG supply, and current and near-term dynamics in the global gas market including Europe’s role in gas demand and the intricacies surrounding Russian gas. Samantha emphasizes the importance of sustained low prices to make gas a stronger part of global infrastructure growth, European industrial demand and the interaction between gas and coal prices, the future of the LNG market, and global acceptance and use of natural gas. We had a hard time ending the discussion and wrapped by asking Samantha for her views on natural gas in the mid-2030s. It was great fun to discuss the global gas world with a fellow gas enthusiast. Thanks to Samantha for joining!
Mike Bradley kicked off today’s discussion by highlighting that this will be an important economic reporting week with both the FOMC Meeting Minutes and the Payroll Revisions (~300-400k downward revisions expected) reports being released on Wednesday. He also noted that the Jackson Hole Economic Symposium will be held on Friday and will be watched closely to see whether Chairman Powell continues with a dovish tone and signals whether a September interest rate cut is still likely. On the crude oil front, WTI price this week has traded down to ~$74/bbl due to lessening concern with an Iranian/Israeli “war premium” and rising concern with Chinese 2H’24 oil growth estimates being revised lower. On the natural gas front, he flagged a handful of key stats, including U.S. & European spot gas prices, U.S. & European gas storage surpluses, and Lower-48 gas production that continues to be stuck in the 101-102bcfd range. He noted ~2bcfd of gas production curtailment announcements from E&P’s Q2 calls but clarified that these gas curtailments aren’t completely evident yet due to continued efficiencies and could become more evident in coming months. Todd Scruggs shared his thoughts on a recent McKinsey report (linked here) that showed the significant scale of net-zero targets (including a scenario that envisions deploying one billion EVs and 35 terawatts of low-emission power generation by 2050), reinforcing that natural gas will remain a critical bridge fuel for a long time ahead.
Thanks again to Samantha for sharing her time and perspectives with us today. She was fabulous. And as usual, thanks much to you all!