The Rise And Fall Of Oil, Natural Gas During 2008

It's been an interesting year (2008) for oil and natural gas markets. As of December 22, crude prices have fallen sharply in recent days and several traders were squaring positions ahead of the holiday break. Oil prices tumbled below $40 a barrel Monday as business news indicated a worsening global economic climate and serious deterioration in energy demand. Light, sweet crude for February delivery fell $2.45, or nearly 6 percent, to settle at $39.91 a barrel on the New York Mercantile Exchange. Crude prices have tumbled 70 percent since peaking above $147 in July. Volume was thin as traders sought to close out the worst-ever year for oil futures, which are now down almost 60 percent since January. U.S. crude for February delivery rose on Dec. 23rd by 11 cents to $40.02 a barrel by 7:44 a.m. EST after falling 6 percent on Monday. ICE Brent rose 20 cents to $41.65 a barrel. As far as natural gas is concerned, on Dec. 22, "The combination of strong supply growth and rapidly declining demand has caused an ugly natural gas outlook to turn much worse," Raymond James analyst J. Marshall Adkins wrote in a research note Monday. Manufactures are slashing production, further eroding prices for natural gas that is used to power machinery. Natural gas for January delivery fell 4 cents to settle at $5.294 per 1,000 cubic feet.

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Comment by Gone Fishin on December 30, 2008 at 9:15am
Is anyone brave enough to give a 5 year outlook on natural gas. Here is a us gov. outlook from december.

Prices. The Henry Hub spot price averaged $6.87 per Mcf in November. Natural gas prices, which have declined from a monthly average of $13.06 per Mcf in June, reflect the impact of increased domestic production, the weak economy, and lower oil prices. While these factors are expected to lead to lower natural gas prices throughout the forecast period, the pass-through of higher natural gas prices paid earlier in the year for supplies that will be called upon to meet winter demand is expected to contribute to a small increase in heating expenditures this winter for households that use gas as their primary heating fuel. On an annual basis, the Henry Hub spot price is expected to average $9.17 per Mcf in 2008 and $6.25 per Mcf in 2009, compared with $7.17 per Mcf in 2007.

http://www.eia.doe.gov/steo
Comment by Keith Mauck (Site Publisher) on December 29, 2008 at 8:23pm
Thanks for the post!

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