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Future of natural gas
Posted on 7/13/09 at 2:04 pm
Posted on 7/13/09 at 2:04 pm
Curious to hear the Money Talkers weigh in on this one. Natural gas prices have been on a sharp decline and are currently hovering near 5year lows. Is there a bright future ahead for NG and what effect will these low prices have on some the independent shale gas players?
3
Posted on 7/13/09 at 2:13 pm to lsugradman
I don't see it bouncing back anytime soon. With Haynesville and the pool in the Gulf, supply is pretty good. The only thing that could effect it would be the devaluing of the US Dollar due to all the stimulus money getting artificially injected into the economy, but that's only a bonus if the price is looked at on its own and not in context of monetary valuation.
Posted on 7/13/09 at 2:18 pm to Bard
Right, and I think there was a recent revision to the domestic gas resource estimate that increased reserves dramatically over estimates just a few years prior. Will we even see a significant spike in prices this winter?
Posted on 7/13/09 at 2:26 pm to lsugradman
I follow this industry closely and expect it to be in the $6.50/mmbtu over the next year. This is what futures markets are quoting.
Production is down due to credit crunch and big producers cannot raise the funds to build new packages.
$5-$6/mmbtu is probably the stablization price over the next few years.
Production is down due to credit crunch and big producers cannot raise the funds to build new packages.
$5-$6/mmbtu is probably the stablization price over the next few years.
Posted on 7/13/09 at 2:40 pm to Bard
The dollar isn't being devalued because of "all the stimulus money being injected into the economy," its being devalued because the world economy has become more integrated and risk-seeking, and has diversified away from dollar assets and dollar reserves. A quick glance at a ten year chart of the would show this vividly.
Posted on 7/13/09 at 2:51 pm to Bard
quote:
With Haynesville and the pool in the Gulf, supply is pretty good.
Don't forget about all the LNG terminals that have been built in the past ten years.
Posted on 7/13/09 at 2:58 pm to Cash
quote:
$5-$6/mmbtu is probably the stablization price over the next few years.
Will some of the smaller shale gas players be able to survive with that price range? I thought i remember hearing that NG has to be at least $7 for plays like the Haynesville to be profitable or am i off base on that?
Posted on 7/13/09 at 3:09 pm to lsugradman
It will be tough for small producers to compete in that market. That is why the larger groups will squeeze the smaller producers by keeping the price low by controling the flow of production.
The industry will go through another round of buying up competition when the big profits cannot be make anymore.
The industry will go through another round of buying up competition when the big profits cannot be make anymore.
Posted on 7/13/09 at 7:45 pm to PNTiger
quote:
I follow this industry closely and expect it to be in the $6.50/mmbtu over the next year
I sure hope your right because I make my living drilling the wells. I don't know anyone else in the industry that shares your prediction. From what I am hearing, it is gonna stay sub $5 for a while. The Haynesville wells are producing a lot more than originally thought so it isn't helping the over supply of gas we have.
Posted on 7/13/09 at 7:48 pm to 8thyearsenior
quote:Does that mean the natural gas "fuel surcharge" on my Entergy bill should go down this coming winter?
it is gonna stay sub $5 for a while
Posted on 7/13/09 at 7:50 pm to LSURussian
Worst line item ever.
Posted on 7/13/09 at 7:52 pm to kfizzle85
quote::kige:
Worst line item ever.
I have NEVER been able to correlate the gas fuel surcharge to market prices for natural gas, even considering hedges and forward contracts. It's just un-calculatable for the customer.
Posted on 7/13/09 at 8:00 pm to LSURussian
I like when they throw those refunds at you for 0.08.
Posted on 7/13/09 at 8:03 pm to kfizzle85
Me, too....
Posted on 7/13/09 at 9:26 pm to LSURussian
I'm willing to enter into a forward contract with someone who wants to bet on the price going up.
Posted on 7/13/09 at 9:48 pm to lsugradman
i was hoping it was going to rebound but that's looking mightly unlikely now.... storage tanks are just about full nationwide. It could get real ugly during September-October.... think $1.50-2.00/Mcf.
Posted on 7/13/09 at 10:03 pm to Tiger JJ
quote:
I'm willing to enter into a forward contract with someone who wants to bet on the price going up.
Good luck with that. Let us know if you find someone willing to do that.
ETA: Maybe you can go to message boards and pull another "pump and dump" like you did with the Phoenix area slabs on here.
This post was edited on 7/13/09 at 10:11 pm
Posted on 7/14/09 at 12:49 am to LSURussian
quote:
Good luck with that. Let us know if you find someone willing to do that.
Find someone to take a bet with me based on the outcome of an event neither of us has any control over? Why, I do believe you yourself did just such a thing in the recent past.
quote:
ETA: Maybe you can go to message boards and pull another "pump and dump" like you did with the Phoenix area slabs on here.
Do you even know what a pump and dump is?
Posted on 7/14/09 at 7:17 am to LSURussian
quote:
I have NEVER been able to correlate the gas fuel surcharge to market prices for natural gas, even considering hedges and forward contracts. It's just un-calculatable for the customer.
If its on your gas bill then I agree, it should obviously correlate. If you are an Entergy customer and you are talking about the fuel charge on your electric bill, remember Entergy's generating fleet in this area is a mix of gas & nuclear. Their system's heat rate factors in to this as well since the fuel surcharge is an expression of their ability to pass their fuel cost along to their customers regardless of system efficiency.
Entergy is a pain in the arse to deal with as an industrial customer compared to CLECO, but their rates are much better.
This post was edited on 7/14/09 at 7:30 am
Posted on 7/14/09 at 7:53 am to Tiger JJ
quote:Can you even reply to one of my posts without asking a stupid question?
Do you even know what a pump and dump is?
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