Replies to This Discussion

Permalink Reply by Joe Aldridge on February 17, 2014 at 0:52

2/17/14 The price opened above Friday's settle and is already at $5:45 @ 5.45 am and rising. So the question is: Will we make it to $6.00 and when?

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Permalink Reply by tc on February 17, 2014 at 2:03

Joe, when did you change the title from $5 to $6?

One headwind for reaching $6 is time, the Mar futures contract expires in about 10 days and then we will be trading the Apr contract and hopefully by that time we won't need as much gas for winter:(

While EIA provides a lot of good info and charts, you have to wonder at this prediction

Gas stocks at the end of March, when the heating season draws to a close, will drop to 1.33 trillion cubic feet, the lowest level since 2008, the Energy Information Administration said Feb. 11 in its monthly Short-Term Energy Outlook.

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Permalink Reply by cocodrie man on February 17, 2014 at 2:04

I delight in the rising price of natural gas but with the injection season likely to begin soon, what do you suppose the new low price will be?  Will not the new low be important in encouraging the much hoped for increase in activity in the Haynesville Shale?  There seem to be many factors against maintaining natural gas prices at this level, such as electrical generators switching from gas to coal and the more moderate weather of spring, to name but two.  I hope the new high price will inform the new low and that price will be at a level that kicks off drilling anew. 

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Permalink Reply by dbob on February 17, 2014 at 2:13

The higher price projections have already prompted TXU to bring a couple of big coal generators out of mothballs - one at Martin Creek, and another and Monticello.

Climate prediction center has revised its 2 week estimate for the east to below normal temperatures, while out west is above normal.  

I really did not expect it, but we may see $6 this week, but I don't think it will find support there.  

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Permalink Reply by Joe Aldridge on February 17, 2014 at 2:15

CM,

I agree 100% that the new low will be the determining factor in the future drilling activity. We'll have to wait and see where that goes. 

And tc,

I changed the topic heading this morning. The strong open suggests that the price may hit $6.00.

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Permalink Reply by cocodrie man on February 17, 2014 at 2:35

The sustainable price needed to prompt increased activity in the Haynesville seems to me a moving target.  The volume of production in the Marcellus is apparently one of several factors forcing an increase in that difficult to predict price level.  I remember that price, cost and value could be impacted by very local circumstance, such as take a away capacity. 

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Permalink Reply by Joe Aldridge on February 19, 2014 at 0:28

The settle price yesterday was 5.55. In over night trading the price has already gone to 5.80. Anyone know why there would be that much move in price overnight?

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Permalink Reply by tc on February 19, 2014 at 2:16

My guesses are thin trading volumes overnight (buyer beware) and/or a colder 10 day forecast.  The below is true for Pittsburgh, where the forecast thru Sat. is warm, close to 50, but starting Sun. the next week is back to the upper 20s.  However, it looks like the April contract is $1 less than the March contract.

As the March contract wanes and the end of the winter season approaches, the market had been anticipating a turn toward warmer weather. Prior weather forecasts had called for a sustained warming trend beginning this week and into next month, but new reports Tuesday revised that outlook and said another cold blast is on the way for much of the northern U.S. through the end of the month and into next.

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Permalink Reply by JHH on February 19, 2014 at 2:20

will hit $6+ at 10:39 am central time... February 19, 2014

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Permalink Reply by tc on February 19, 2014 at 3:11

Jay, do the subscription service give any reasons for the predictions?  For $4 is it because we have a normal to warm winter next year, supply increases faster than demand?  By the way the futures curves match these predictions.

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Permalink Reply by jim weyland on February 19, 2014 at 5:21

imo, this winter's jet stream setup will be the gift that keeps on giving inre: gas prices.

while the easternmost two thirds of the lower 48 has been getting clocked with extreme cold, the pacific coast states have also been getting creamed, but in a different way: extremely low snowfall/snowpack.

again, imo, this will affect gas prices significantly later this year because a very considerable % of their generation capacity is hydro.

memo: there ain't goin' to be much of that this year. and, if they get an extremely hot summer out there, well, watch out.

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Permalink Reply by Skip Peel - Mineral Consultant on February 19, 2014 at 5:30

A little cold and snow pales in comparison to wildfire.  It'll be a tender box out there.

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