ShaleGeo or anyone else interested, wanna call the bottom?
Anyone have any guess where the price of gas will bottom out. I want to know when to stop holding my breath.
Views: 9016
Replies to This Discussion
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Permalink Reply by Bobi Carr ("parker") on
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Just revisiting this question.
Does anyone think we have reached the bottom?
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Permalink Reply by Clyde T. Williams on -
Temporary shoulders - but someone will prefer 90%of something vs 100% of nothing/shut-ins. Current prices at 2.65 should decline will decline as the heating season passes and storage reserves are topped up...late April/early May...I still bet on $2.25....
NYState will soon decide on Fracking or not and that is important as everryone has been pumping up the need, jobs, royalties, etc....and if approved the drillerrs will need to show-off and start pumping gas...if they go ahead with some condensate refiners soon then they will need fixed-in feedstock and that means pumping lots of gas...so $2.25MMBtus is my guess???? Tom
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Permalink Reply by Two Dogs, Pirate on
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I am with you Jay, I say $1.80 and it may happen sooner than later.
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Permalink Reply by Aubrey C. Sanders, Jr. on
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About $1.35. I remember in late 50's we got all the gas we could use for $1.00 per month from pipeline which crossed our property. No meter required. And, No, we did not have to steal it!!!
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Permalink Reply by Two Dogs, Pirate on
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Mr. Aubrey, I sure hope that you are wrong but you may be right. The dry gas plays will narrow their area to what they have under lease and will not expand out, the wet gas areas will expand out pumping more gas into a flooded market. The folks need to go to NG, they will save big time in the next decade.
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Two Dogs, I hope I am wrong. I am fortunate to have most of my interests in Smackover frm. which has wet gas, condensate and oil. XTO has drilling plans for a number of wells in North Shongaloo-Red Rock Field and Cotton Valley field after a hiatus of more than a year. I am fortunate that one of them is on my land. Building location now.
You are absolutely right about going to NG. I wonder how many people are aware that you can get home fueling pump for their vehicles? I cannot fathom the fact that Phoenix is so far ahead of where I grew up and natural gas is so plentiful down there. Looks like some progress is being made down there.
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Permalink Reply by Parkdota on
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In the News:
Natural Gas Power Burn Up, Even in a Warmer Winter
December retail sales of electricity showed the second greatest year-over-year decrease for the month since the U.S. Energy Information Administration (EIA) started collecting data in 1973, due in part to a relatively warm winter this season. Despite this 6.1 percent drop in retail sales, natural gas consumed for power generation in December increased 8.2 percent over December 2010 levels. More recent BENTEK Energy LLC (Bentek) estimates show that natural gas consumed in the power sector this February was almost 27 percent greater than the natural gas power burn in February 2011, and 17 percent greater in January 2012 than in the same month in the previous year. In contrast, EIA’s estimates of coal consumed for power generation for December of 2011 were 17.4 percent lower than the previous December.
*** Is it possible the above data will aid in catching up to the supply glut? Is the data not a positive sign? ***
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Permalink Reply by Clyde T. Williams on
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Watch out when trying to catch a dropping multi-Edge sword...
Edge 1 - Energy conservation has been catching up - more profitable than solar-voltaic/thermal panels...which are starting to represent 1-2%
Edge 2 - Cheap gas and spot market power = fewer long term contract hedging
Edge 3 - Coal may be cheap but when the overall demand is lowered CoalPlant have lots of available electricity with fewer purchases = depressing the spot market but not enough to compete with NG...
Edge 4 - NG Storage - in the South and West - NG storage are have a bad year - stored expensive gas then the price started tanking - so I would assume storers are trying to unload stored NG...as the winter does not look like it is coming back.
We have some dumbies out here that hedged contracts at $5.5-6.5 so I don't know what they are doing now...hope they had escape clauses...
I don't know how much can be shut-in but I think it will be a long time before we see >$3 with all of the fracking tha is going on...but we have done Booms-N-Busts - remember the Savings/Loans "Bubble" or that other one ENRON??
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Permalink Reply by Skip Peel - Mineral Consultant on
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Natural gas drops to a 10-year low; oil rises
NEW YORK (AP) — The price of natural gas dropped to the lowest level in a decade Wednesday as a mild winter comes to a close with a huge surplus of the fuel on hand.
Natural gas supplies typically drop in the winter as homes and business crank up the heat. But relatively warm temperatures, combined with a boom in production, has left storage facilities bloated with more gas than normal.
Natural gas futures fell by 4.5 cents to $2.311 per 1,000 cubic feet in New York. That's the lowest price since Feb. 25, 2002 and down 70 cents from the start of the year.
Independent commodities trader Stephen Schork said that natural gas could drop even further in coming weeks, possibly below $2 per 1,000 cubic feet, if demand declines as usual in the spring, in between the heating and air conditioning seasons.
"There's just too much out there," Schork said. "And there won't be enough demand to solve the supply issue this summer."
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Permalink Reply by DrWAVeSport Cd1 on
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Skip,
Good Barnett Article in Star-Telegram by Jack Z. Smith: "DFW governments adjust to life after the Barnett Shale boom"...Barnett Shale:
http://www.star-telegram.com/2012/02/28/3770930/dfw-governments-adj...
"Fort Worth recently lowered its estimate of income from gas lease bonuses and royaties by nearly $334 million over 25 years. CFO Lena Ellis said the projected revenue, previously pegged at $1.03 Billion, has been slashed to $697.5 million, a 32 percent reduction."
Looks like every Sector is going to have to tighten the old belt per nat gas revenue losses.
It's too bad that way back in early 2000 when land leasing for Barnett got started on the q.t. the Nat Gas Gurus didn't have a game plan for what they were going to do with ALL THAT NAT GAS... and get the LNG, CNG projects on the drawing board sooner. Maybe in 2012, all that GLUT GAS would have had somewhere to go...instead of Storage???? And prices @ $2.30.
So much for NAT GAS Gurus. LOL
DrWAVeSport Cd1 3/7/2012
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Permalink Reply by essay on
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supply, or slightly more precisely, production... creates it's own demand. we're seeing it now with every move to NG transport, NG electricity generation, new ethane cracking plant etc, and this period of transitory low prices is the down payment for this future demand. "the best cure for low prices is low prices."
keynesians would disagree with this supply side view but it is what it is.
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Agreed.
But... Some real "insight" earlier than the last few years" would have better served all Players in the Nat Gas Shale Rushes... IMHO.
Not much Thinking per Planning... Much Thinking per Grabbing...
DrWAVeSport Cd1 3/7/2012
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