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Started By
Message
Damn the bottom fell out of NATGAS
Posted on 1/2/19 at 9:08 pm
Posted on 1/2/19 at 9:08 pm
Just pulled up the last month chart, what cratered gas? The market in general?
4
Posted on 1/2/19 at 9:24 pm to Strannix
Warm weather across much of the U.S.
This post was edited on 1/2/19 at 9:33 pm
Posted on 1/2/19 at 9:38 pm to Strannix
Well it was irrationally high in the first place so this “crash” back to normalcy was to be expected.
Posted on 1/2/19 at 9:51 pm to iAmBatman
I remember when it was 14.88 a thousand....oh the days
Posted on 1/3/19 at 7:48 am to iAmBatman
quote:It was not. Market bought into the overwhelming production story without any regard for actually being able to get the physical gas where it was needed during periods of sustained cold. We had a cold early start to winter, and the run up came all at once rather than end users slowly layering in risk protection.
Well it was irrationally high in the first place so this “crash” back to normalcy was to be expected.
-incredibly low storage heading into withdrawal season despite record production levels
-maxed out pipes heading into many demand centers
-far less coal-to-gas switching available with so many coal retirements in recent years
-increased LNG exports also make for a much different market than people are used to. US gas pricing is far more susceptible to global weather than it has ever been in the past.
It was a weird year, but that run up was very real. It was a razor thin market, and weather always was (and still will) going to dictate titanic swings in pricing until a lot of the new pipelines get finished in 2H19.
This post was edited on 1/3/19 at 7:55 am
Posted on 1/3/19 at 11:52 am to Strannix
Not on my natural gas bill. Highest per therm it has ever been, through a municipal provider.
Posted on 1/3/19 at 3:27 pm to iAmBatman
This could be a wake-up call for renewables. I long for the day when over 50% of Texas energy comes from wind!
As recently as 2010 coal was the big player in Texas power plants and then cheap gas almost eliminated the need for coal (as well as increased EPA regulations). Now that the profit margin has been taken out of natgas generated power, can we talk, wind, wind,....WIND!
As recently as 2010 coal was the big player in Texas power plants and then cheap gas almost eliminated the need for coal (as well as increased EPA regulations). Now that the profit margin has been taken out of natgas generated power, can we talk, wind, wind,....WIND!
Posted on 1/3/19 at 3:33 pm to tarzana
quote:Your dumbest post ever. And that's really saying something.
Now that the profit margin has been taken out of natgas generated power
Power generating plants that use natural gas for their fuel have higher profit margins when the price of nat gas is low.
Posted on 1/3/19 at 3:39 pm to LSURussian
quote:
Power generating plants that use natural gas for their fuel have higher profit margins when the price of nat gas is low
If the price of natgas is low, then what incentive is there to produce it? It may become relatively scarce if it's unprofitable to produce.
Think renewables. It's the wave of the future, and the Lone Star State leads the way.
Posted on 1/3/19 at 3:50 pm to tarzana
quote:If nat gas becomes "relatively scarce" its price will go up thus giving an incentive for more production.
If the price of natgas is low, then what incentive is there to produce it? It may become relatively scarce if it's unprofitable to produce.
Jeez, you're an idiot.
Posted on 1/3/19 at 5:46 pm to tarzana
quote:The vast majority of new gas production is associated gas from oil drilling. They can only flare so much, so there is plenty of gas that still needs to make it to market.
If the price of natgas is low, then what incentive is there to produce it? It may become relatively scarce if it's unprofitable to produce.
Not to mention the price of gas is relatively inelastic currently given there is little coal to gas switching available and renewables often provide nothing for power gen when the weather doesn't cooperate. This will be an issue until battery costs become a lot more economical.
This post was edited on 1/3/19 at 5:49 pm
Posted on 1/4/19 at 10:42 am to LSURussian
quote:
quote:
If the price of natgas is low, then what incentive is there to produce it? It may become relatively scarce if it's unprofitable to produce.
If nat gas becomes "relatively scarce" its price will go up thus giving an incentive for more production.
Jeez, you're an idiot.
Wow!
Posted on 1/4/19 at 10:43 am to Louie T
Gas will sit in the $2-$3 range for the foreseeable future...even with LNG. There's just too much.
Posted on 1/4/19 at 11:04 am to cwill
Oh yeah. This was a 2018-2019 winter strip conundrum for sure. Unless decline rates at these wells are far, far higher than producers are leading on (which I believe is happening to a degree), post 1H19 nat gas pricing will get ugly.
Nat gas is going to become a weird beast to price with investors forcing standalone gas drillers to focus on shoring up balance sheets over new drilling & having an increasingly large share of marketed gas coming from oil drilling.
ETA: I think you'll see sustained periods of sub $2 natty.
ETA2: 20 Bcf withdrawal this week including a 22 Bcf injection in South-Central salts haha... might get uglier sooner than most even anticipate. Deficit going to flip to surplus quickly unless some really cold weather plows the south & NE.
Nat gas is going to become a weird beast to price with investors forcing standalone gas drillers to focus on shoring up balance sheets over new drilling & having an increasingly large share of marketed gas coming from oil drilling.
ETA: I think you'll see sustained periods of sub $2 natty.
ETA2: 20 Bcf withdrawal this week including a 22 Bcf injection in South-Central salts haha... might get uglier sooner than most even anticipate. Deficit going to flip to surplus quickly unless some really cold weather plows the south & NE.
This post was edited on 1/4/19 at 11:31 am
Posted on 1/4/19 at 11:31 am to Louie T
quote:
post 1H19 nat gas pricing will get ugly.
Storage ~20% below 5-year average.
5 Bcf/d of LNG export demand coming online in 2019.
Limited incremental gas out of the Permian - no pipes to get it out until very late 2019.
Haynesville slowing down.
Northeast drillers pumping the breaks due to shareholder demands.
This post was edited on 1/4/19 at 11:32 am
Posted on 1/4/19 at 11:48 am to raw dog
quote:20 Bcf withdrawal last week. That deficit is going to be kaput without a bunch of cold in Feb-Apr.
Storage ~20% below 5-year average.
quote:Yep, that'll be a big demand pull.
5 Bcf/d of LNG export demand coming online in 2019.
quote:Already addressed by my 2H19 comments; a lot of that will be alleviated.
Limited incremental gas out of the Permian - no pipes to get it out until very late 2019.
quote:Already addressed
Northeast drillers pumping the breaks due to shareholder demands.
Posted on 1/4/19 at 11:51 am to Louie T
But sustained periods of <$2 gas? I disagree
Posted on 1/4/19 at 11:52 am to raw dog
Doubt you see much in winter strips, but I think you'll definitely see long periods of summers with <$2 ng.
Also important to note that much of this is dependent on price of oil, which I'm not speculating on. $50 WTI and you'll lose a ton of associated gas.
Also important to note that much of this is dependent on price of oil, which I'm not speculating on. $50 WTI and you'll lose a ton of associated gas.
This post was edited on 1/4/19 at 11:53 am
Posted on 1/4/19 at 11:58 am to raw dog
quote:Please see my note to you in the updated YTD rankings on page 11 in our 2019 stock pick'em contest thread.
raw dog
One of your stocks, OSTK, did not meet the $500 million minimum market cap requirement as of the 1/1/19 deadline for picking stocks. (It still doesn't meet the requirement.)
Please replace it with another stock ASAP. You're at risk of being removed from the contest. Thanks.
Posted on 1/4/19 at 12:37 pm to LSURussian
Responded. $20mm away. This one will cost me the contest - time stamp it.
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