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The North American oil and natural gas midstream sector is certainly not “out of the woods,” but 2021 could look relatively “normal” in 2021, according to Raymond James & Associates Inc. Though driven largely by supply, the Raymond James team remains bullish on the price outlook across the hydrocarbon spectrum. The analysts said the demand-pull environment “still looks attractive” in 2021 and beyond, with the recovery in U.S. liquefied natural gas (LNG) exports adding to a “solid base.” U.S. LNG exports “have recovered massively thanks in part to soaring Asian prices — as about as good of a recovery play as one can find within the U.S. midstream space,” said the Raymond James team, led by analysts Justin Jenkins and J.R. Weston. Furthermore, natural gas liquids (NGL) markets are expected to tighten and support gathering and processing (G&P) and pricing, according to the analysts, with G&P offering investors the most “bang for their buck” going forward. Propane markets, meanwhile, are “very tight,” though the budding optimism in the market “might be a touch excessive.” Additionally, the firm said with demand/export growth on deck and some supply headwinds, ethane recovery “should happen everywhere” other than the Bakken Shale — “perhaps […]
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