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Permalink Reply by P.G. on October 13, 2010 at 15:10

If someone could figure out a way to sell NG to China it would probably go up in price like all the other commodities prices are on what they are now stockpiling..

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Permalink Reply by DJG on October 13, 2010 at 17:01

I think that Aubrey McClendon has already found out how to sell NG to China. One piece of his company at a time.

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Permalink Reply by Skip Peel - Mineral Consultant on October 13, 2010 at 15:26

It appears that there are no advantageous hedge opportunities available currently. Even for mid-majors like Devon.

SAN FRANCISCO, Oct 12 (Reuters) - Devon Energy Corp (DVN.N) wants to keep hedging half its oil production, but sees no need to do so for its natural gas output with prices depressed due to oversupply, its chief executive said on Tuesday.

"The kind of hedges you can do are just locking in the bottom. Why bother?" Devon CEO Larry Nichols said at a meeting with investors in San Francisco.

Nichols had said earlier this year he aimed to hedge about 50 percent of Devon's oil and gas production, but gas prices have steadily fallen as producers keep drilling to hold their leases and they ignore the price signals that tell them to stop bringing on new supply.

"They're more than signals, they're neon signs," Nichols quipped.

He expects an eventual recovery in natural gas fundamentals once utilities start burning more in power plants, now that the vast potential of North American shale gas has been realized.

"We're like kids who suddenly found the candy store and are trying to eat everything at once," he said of the natural gas drilling industry in general.

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Permalink Reply by P.G. on October 13, 2010 at 17:04

I got my gas bill today it looks like I'm paying over $10 a thousand cubic feet...

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Permalink Reply by ALongview on October 13, 2010 at 17:49

You would think that any commodity priced in dollars in this weakening dollar environment would have some bump up. It already takes more dollars to buy the necessities than it did at the first of the year. Maybe after the next fed meeting????

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Permalink Reply by Les Bamburg on October 13, 2010 at 18:17

AL, the price of natural gas, like other energy commodities, is a function of supply and demand rather than inflationary trends. Producers hedge with financial institutions rather than end users. Most have already hedged 2011 and some 2012 natural gas production and would look for additional hedging if the forward prices improve.

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Permalink Reply by P.G. on October 14, 2010 at 0:08

How come the gas company charges consumers about 2 1/2 times the price that NG is selling for at the well? They also charge a transmission fee in addition to a $10 fee. NG hasn't been over $10 at the well for quite some time..

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