Replies to This Discussion

Permalink Reply by Inquirer on February 20, 2014 at 13:46

$6.15     E i   E i   O!

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Permalink Reply by ATLGator on February 21, 2014 at 8:54

Can the April contract break $5? $4.992 as I type. If the back of the curve starts moving then we might get some interest going in NG again!

Interesting that the future months are moving more than the front month contract today...

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Permalink Reply by jim weyland on February 21, 2014 at 9:02

as to the pattern of today's price movements, imo, it means someones are drinking the kool aid. and, that ain't bad.

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Permalink Reply by cocodrie man on February 22, 2014 at 1:47

As an eternal newbie, often clueless to things I ought be paying attention to, thank you for the implied advice to pay closer attention to the price for future months.  The April contract has gone above $5.00. 

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Permalink Reply by Joe Aldridge on February 22, 2014 at 1:47

Well let's see.......... A little recap for last week. We hit 6.30 before March 1st. April is already at 5.00+ and the rest of the year is in the 4.70's with Jan and Feb 2015 already close to 5.00. I still cannot understand the lag in the movement of the market before Jan. All of the signs were there that showed NG was under priced. It will be interesting to see what this price will have on drilling and production.

I'm not sure the 4.70+ for the rest of the year is going to be a good or stable price. I think a more realistic price would be 4ish.

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Permalink Reply by Paul Patel on February 22, 2014 at 3:52

I agree with Joe, that Natural Gas is undervalued. I also feel that the true test is going to be how quickly the supply can be replenished.  Is that why the summer prices are hovering in the $4.70 range?

As we are part of 30 year cycle I feel that cold winters will continue for another 12-15 years before things start to get better.

As for the replenishment of the supply, a lot of locations that are drilling for oil are burning the gas.  Could this change because of where prices of gas were versus where the price is now.  I feel that this is a variable that could work against the price of natural gas.  What you guys feel about this.

I am still a new to all this commodity thing.

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Permalink Reply by jim weyland on February 22, 2014 at 5:26

i spent my entire career on the buy/sell sides of the gas business. i only know/have one truism: the gas market always overreacts before eventually finding an equilibrium point appropriate for "that" point in time. and, i gave up trying to predict prices long, long ago.

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Permalink Reply by Randy Peterson on February 22, 2014 at 8:10

Jim Weyland, You are an honest man for saying that you have given up predicting prices. Too bad that the thousands of Obama's "experts" on energy can predict prices out to 2040. Of course, sometimes it takes them Five years to "Study" a pipeline project.

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Permalink Reply by tc on February 22, 2014 at 8:40

The main reason they burn off the gas is because it wasn't profitable for NG pipelines & gathering lines to be laid.  As that is a multi-year & multi-billion effort, I think we are still years away from that happening.  It was just announce they want to build a 100 mile NG pipeline from central PA (Marcellus Shale) toward NYC transmission line and the cost is over $2B, think how much a line from the Bakkens would cost to reach major NG consuming areas.

Fun fact from local news channel, per NOAA this Jan. was the world's 4th warmest on record since 1880, only the eastern US was really colder than normal.

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Permalink Reply by Krkyoldhag on February 22, 2014 at 8:17

You are so right about the five year study.

I really don't know anything about Tar Sands and the XL pipeline to whether the stuff that will run thru it are good or bad "stuff". 

But I do know that pipelines are necessary and good things.

On prices...if the experts think that there has been no cost of living increases they have not gone to the  gas station, grocery store, paid a co pay for medical care, bought RX's, paid a utility bill or taxes in last few years.

Natural gas will continue to go up up up is my prediction.  My HOPE is that drilling will commence here in Haynesville asap.

So right now am happy with the $6.14 price and hoping to see it continue to increase.

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Permalink Reply by jim weyland on February 22, 2014 at 9:42

the thing about the canadian oil sands production is that it is going to be developed and produced. and, that's regardless of the desires of the u.s. "let's save the squid" people that would wish to happen by obstructing the keystone xl portion.

if the stuff doesn't come south to us where our gc refineries are already set up to refine poorer grades of crude, then it'll go west through canada via pl where it'll then be exported to the pacific rim countries. again, notwithstanding the keystone xl pl obstructionists' wishes, it's going to be developed/produced. and, that's a military fact because it's economic.

as to what the stuff's like, many years ago, while still in school, i worked in an r&d lab where the outfit i worked for specialized in finding chemical and mechanical solutions to all sorts of "difficult" crude situations/problems. one day, we received two or three 5 gallon white buckets containing tar sands crude from imperial oil (exxon's canadian affiliate).

now, if you're old enough, you'll remember getting tarballs on the bottoms of your feet while at the beach. this was the case from mobile, alabama all the way  south to padre island, tx. note: the reason tarballs are infrequent today is because we've found and produced most of the oil from the fields on the shelf where the oil "seeped" from that became those tarballs.

so, that's exactly what the canadian tar sands oil is like. it ain't pretty, but it is economic and it will be produced.

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Permalink Reply by jim weyland on February 23, 2014 at 15:13

do we want five bucks?

well, jan '15  printed $5.047 on close.

looking at it from a "technical" or "chartist" perspective, imo, this is huge.

not that i am one one of those folks, but some/often times they're are right.

for the record: the cited print is from the merc "access" trading close, sunday, 2/23/14. 

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