When will NG price hit $5.00

We are seeing a new trend of earlier and colder Winters. The price of NG is starting to climb. The question is: When will the price hit $5.00. May be before March 1st. Any other guesses? 

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Permalink Reply by Aubrey C. Sanders, Jr. on January 26, 2014 at 4:41

krkzyoldhag,

I think your idea for section for us "Oldies" is great. Bet some of the younger members will read it too. I think it could be invaluable to the younger generation. While we are around we should "educate" youngsters on "what it was like back then."

I think we have come a long way with this site. Most of current members will not remember when I originally proposed that we expand site to cover Smackover formation. There was a hue and cry by some members that the site was just for Haynesville Shale. Funny thing is that Haynesville shale is but small part of Haynesville Formation. Long story short, we did start a Smackover formation which morphed into LSBD.

I very much hope that someone will make the effort to propose a site such as you mentioned. We might even add some tidbits about development and changes in oil business over last 75+ years.

Maybe we can help one another with advice about repairing wash pots and even the use of "hay wire" which is rapidly being replaced by JB Weld. BTW, if you can't get it brazed try some JB Weld.

Permalink Reply by adubu on January 25, 2014 at 6:21

in 2001 when NG hit $5 i was told "don't get use to it for $5 will not hold"---- My friend was correct for next 6 years( He thought it would fall back to $3 range)  for NG still not stay at $5 --never saw $5 again until 2007-- it hit $14.50 before it rolled over. Doubt We see $14 but will see $6 before <$4 again --- IMO too many bullish market facts for NG 

Permalink Reply by tc on January 25, 2014 at 7:59

Your memory is faulty.  By Feb. 2003 over $9 and a few storms called Katrina, Rita & Wilma in 2005 caused NG to peak over $10 for 4 months starting in Oct. 2005.  In fact Feb. thru May 2003 was the last time NG storage was under 1 tcf, with it bottoming out at 642 Bcf. on 4/11/2003.

Permalink Reply by adubu on January 25, 2014 at 16:33

tc--- read again THAT WHAT I SAID after above $5 in late 2001 it never saw $5 again for 6 years 

Permalink Reply by Joe Aldridge on January 26, 2014 at 2:24

OK, we made the $5.00 and now are looking at 6+. I'm guessing that the price will end up in the 6 to 6.50 range before the Winter is over. Then fall back to 4.50 to 5.00 over the Summer. I don't think we'll see prices in the 3's again unless there is a lot of Alt. drilling. Then that would be a case of the companies shooting themselves in the feet so to speak.

Permalink Reply by dbob on January 26, 2014 at 3:38

You have to keep the national picture in perspective.  There is still lots of dry gas Eagle Ford to HBP, Flaring in the Bakken is causing lawsuits, and there is still lots to do in the Utica and Marcellus.  

There is an emotional component to storage falling below the 5 year average, and the extremely high spot prices in the pipeline constrained NE make for great news stories, and may be clouding the judgement of the folks trading options.  It will be fairly easy to fill storage back to near record levels, unless there is a massive improvement in the economy, coupled with an exceptionally hot summer.

Permalink Reply by tc on January 26, 2014 at 3:39

We could be under $5 by Monday.  NG was up 20% last week, so profit taking would not be unexpected.  The Feb. 14 contract should be rolling over to the March 14 soon and yesterday the latter was at $4.75.  Also they just changed the 10 day forecast for Pittsburgh, by Thurs. we are supposed to over 32 for the next 5 days.  That is a 5-10 degree increase from Friday's 10 day forecast.  Of course yesterday we were forecasted to get 1-3 inches of snow and got 6, so take these forecast with a large grain of salt.

We still have a lot of winter left so $6 to $6.5 is still possible depending on the weather.  I believe that the true test of where NG is going is how easily is storage replenished.  If by Oct. the NG companies have successfully filled storage to a record level again then NG users will know that they don't need to bid up NG because there will always be enough supplies for 95% of the probabilities.  

Permalink Reply by Joe Aldridge on January 26, 2014 at 4:16

I agree that there will be profit taking Monday. There was some late Friday. How much that will effect the price and for how long remains to be seen. I think that will be short term.

While the temp. will moderate in the near future I think the amount of withdrawal from storage will be the true driving factor at least for the short term or so.

The weather forecasters are predicting a change in the weather pattern to a more southern flow and that will pick up more moisture from the Gulf and cause more snow along the East coast with more normal Winter Temps.

Permalink Reply by Krkyoldhag on January 26, 2014 at 4:20

I had dinner with an old friend who's husband is connected to the energy business in some way.  Something to do with rigs.  Anyway..I asked him..if the increase in NG prices to $5 plus will bring drilling back to Haynesville.

He stated that it would not.  That the producers want liquids.

Does this sound right?

Permalink Reply by Paul Patel on January 26, 2014 at 5:07

I have heard something of the same.

However from what I hear that drilling can be profitable at prices above $5.  A lot of it is speculation so I feel that time is the only thing that will "tell the tale".

 

Permalink Reply by tc on January 26, 2014 at 5:15

Yes.  The cold is also causing a price spike in propane a major component of "wet gas"/liquids.  Plus propane can/is exported out of the US, where prices are normally higher, when the current price spike subsides.  If companies could sell a 2 to 3 year strip of NG for over $5, currently it is around $4.25, I think there would be more interest in the Haynesville.  This is a sliding scale that is different for each company, $5 could being more enticing to EXCO who have fewer liquid options, while EOG with their large Eagle Ford & Bakken acreage may want $7 before the start drilling Haynesville wells.

Permalink Reply by Aubrey C. Sanders, Jr. on January 26, 2014 at 5:16

I agree with his assessment.

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