Replies to This Discussion

Permalink Reply by Les Bamburg on March 17, 2011 at 17:16

GD, LNG is essentially a non-factor since it accounts for less than 1% of US supply.

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Permalink Reply by Wilma Watts on March 18, 2011 at 4:02

Morgan Stanley held a conference call yesterday discussed the energy markets and impact of recent events in Japan and the Middle East. JP Morgan also issued a note on the issues.

They see oil prices in a trading range, with a possible spike this weekend on bombing runs from France over Libya.

JP Morgan claims 1250 on the S&P 500 will be the low for the year with the sell-off creating ‘potentially a very bullish opportunity’ with that level being the ‘low for the year’. On March 16 (Wednesday) the S&P 500 hit a low of 1256 and has since recovered to 1273 yesterday. Futures are positive for the opening today.

The analyst calls, their forecasts of oil prices and stock markets, and recent data on household wealth on a blog today (March 18):

http://www.lsgifund.com/index_files/Page960.htm

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Permalink Reply by Mattie on March 18, 2011 at 4:20

I can agree with most all of the comments posted - any hype on reducing (vs. increasing) the domestic and international nuclear footprint would logically have at least a psychological effect on the NG marketplace.  It's my opinion that the NG NYMEX floor will never go much below the $4.00 threshold simply due to the basic finding and development cost issue...... although, the market seems to be stuck at that level based on current supply/demand forecasts.  

 

All that being said, my biggest question is whether this crisis has the effect of putting the "coal proponents" in a better position to push their own agenda for "clean coal" to the detriment to a stronger energy policy for NG development - I, for one, don't think it's the time or place to eliminate any energy options (including nuclear), but if this adminstration (and future administrations) are going to continue to push the "green initiative", then I don't  want NG pushed back into the corner to the benefit of the "coal agenda" because of a singular crisis. 

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Permalink Reply by Scott on March 18, 2011 at 6:38

Gas Rig count down to 875. Count is dropping in the right direction. 

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Permalink Reply by P.G. on March 18, 2011 at 9:18

Looks like if NG prices are to rise, maybe we have to start thinking Corn!

Weren't corn prices always cheap until they found a way to sell it to the transportation market?

Now look at those prices!

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Permalink Reply by MARG on March 20, 2011 at 15:53

Seems to me that they will need a lot of construction and infrastructure.  Who will sell them cement, steel and copper (has to be important as much as they steal in our area)?  Is that an opportunity to do good as well as providing work and salaries for many in these "hard times"?  Hey "Little Ole' First Grade Teacher" you and I do not want to help with the school buildings, etc. do we?   LOL

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Permalink Reply by little ole 1st grade teacher on March 20, 2011 at 16:26

Where I am, they have put about 8 schools (set to open as far out as 2017)  on hold as far as building at this moment.  Schools are already filled to capacity and portable buildings are needed even before the schools open.  This has been going on for several years.  We have well over 105,000+ students in our district.  And, with the new cap on number of students in a class, I am looking to have at least 22 students with a possiblity of 25 next year.....Can you imagine 25  1st graders!!!!    LORD,  HELP ME!!

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Permalink Reply by kittycatmama on March 20, 2011 at 17:13

Companies that supply to builders are already telling them to get ready for some steep price increases ala Katrina. They are saying all of our products will be exported to Japan for them to rebuild.

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Permalink Reply by Parkdota on March 28, 2011 at 14:21

Article

Conoco Could Quench Japan’s LNG Thirst

Mar. 28 2011 - 6:11 pm | 169 views | 0 recommendations | 0 comments

Posted by Trefis Team

Japan will need lots of LNG

Oil and gas companies like ConocoPhillips, along with Exxon Mobil and Chevron, will gain from increased demand of natural gas as prices have bounced following the recent earthquakes in Japan. These earthquakes have caused disruptions in the country’s nuclear power plants, and 11 reactors have been shut leaving many without power. Nuclear power supplies about 30% of Japan’s electricity needs, and Japan is expected to turn to natural gas to help fulfill the country’s energy needs. ^[1]

We have a price estimate of $68.44, which is about 8% below the market price.

Conoco previously announced plans to close its Kenai LNG plant based in Alaska that mainly serves Japan after contracts with Japanese utilities could not be renewed. In light of the recent events, Conoco and its partner Marathon Oil are monitoring the situation closely to help in the short term, but so far they have not changed their plans to shutter the plant. ^[1]

The energy sector has seen a rapid rise in natural gas production from shale formations due to significant advances in the use of horizontal drilling and well simulation technologies. Global production of natural gas in 2009 was nearly 3 trillion cubic meters while the consumption was nearly 2.9 trillion cubic meters. The rise in natural gas production has kept the prices from rising rapidly after the fall during the economic crisis of 2008-09.

 

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The average realized price of natural gas for ConocoPhillips touched the high of $8.28 per thousand cubic feet during 2008 due to a spike in energy prices following the rise in crude oil prices but fell to $4.30 due to the global economic crisis which impacted energy demand globally. Prices have been slow to recover and gained only 58 cents in 2010 because of the high inventory levels. Natural gas inventories in the U.S. totaled 1.67 trillion cubic feet for the week ended March 4, 2011, about 1.9% above the last year’s level.

Japan has little or no domestic production of natural gas and relies on imports of Liquefied Natural Gas for its needs. Japanese demand for natural gas is expected to increase by 5 billion cubic meters in 2011 which will reduce the current high inventory levels and boost prices.

ConocoPhillips derives almost 7% of its value from natural gas operations. The company produced more than 1,600 billion cubic feet of natural gas in 2010 and stands to benefit from any rise in natural gas prices due to high Japanese demand.

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