Replies to This Discussion

landownerPermalink Reply by ALongview on February 22, 2011 at 5:58

Les, Could this LNG price link to oil push/speed the development of the domestic export facilities to supply Europe with a safer supply of LNG?

 

 

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Oil & Gas ProPermalink Reply by Les Bamburg on February 22, 2011 at 8:04

AL, if potential LNG purchasers believe the current $5-6/MMBtu spread between US and European prices will be maintained for 20 years, they should be willing to sign the long term commitments required to underwrite LNG export facility investments.    

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landownerPermalink Reply by kittycatmama on February 24, 2011 at 2:50

Les, even though NG and Oil are on two different demand levels, didn't high oil prices the summer of 2008 have a psychological effect on pulling on NG with the traders. In 2008 we still had lots of gas with the Barnett Shale, but it went to 13

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Oil & Gas ProPermalink Reply by Les Bamburg on February 24, 2011 at 14:15

KCM, natural gas prices climbed based on their own supply-demand.  Realize the US has added over 4 Bcfd of supply since then and demand is lower.  You noticed that when oil prices recovered from $40/Bbl natural gas did not follow suit.  So I believe even the psychological linkage has been broken.  Now, natural gas has more in common with coal than oil - at least in the US.  International markets are a whole different story.

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landownerPermalink Reply by Jack Blake on February 23, 2011 at 6:07

hhhmmmmmmmmmmmmm thought Jack Blake.  jack would like to see gasoline prices so high that the US consumers would demand an alternative.  Jack sees NG as the alternative. 

SIXDOLLARSAGALLONFORGASOLINEWASTHERALLYINGCRYOFTHEDAY

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landownerPermalink Reply by Max on February 23, 2011 at 6:37

Treat gasoline like cigarettes, put a two dollar tax on each gallon, then see what happens.

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landownerPermalink Reply by P.G. on February 23, 2011 at 7:20

The politicians pushing for that would have to hide out in Illinois, huh?

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landownerPermalink Reply by essay on February 23, 2011 at 6:40

too bad the white house and most democrats see electric vehicles as the alternative, but look on the bright side, they want $5+ gasoline too.

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Permalink Reply by TAURUS on February 23, 2011 at 16:48

Careful what you wish for ... you're likely to get the $6/gallon gas and no progress on the the NG end of things.

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Permalink Reply by Parkdota on February 23, 2011 at 17:25

The rise in pump prices means a rise in government tax revenue as the rough mean of pump taxation is around 40%.  The government isn't going to push for natgas usage.  They'll only move when the people get unruley which will be when prices reach the breaking point.  The question is what is that breaking point?  $4.....$5....maybe $6?  I don't wish suffering on anyone but I think the recession, a possible double dip recession, inflation, hightened energy costs, and the costs pushed from energy to all other sectors makes for a possible breaking point.   

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landownerPermalink Reply by JHH on February 24, 2011 at 3:02

Doesn't look that way.  Remember, we're in Bizarro-Land!

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Oil & Gas ProPermalink Reply by Shaley on February 25, 2011 at 2:30

No connection between crude oil and natural gas prices these days. Used to be gas and oil were traded on a 6:1 - 8:1 ratio (i.e. if crude was $30, natural gas was around $5). It's almost a 25:1 ratio today. Simple case of supply and demand - too much natural gas and not enough demand for it. Natural gas is a domestic resource and there is not enough demand for it in the US. Oil is an international commodity and subject to worldwide events (i.e. current Middle East situation). Until demand starts to catch up with supply, prices for natural gas will stay supressed.

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