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What is Up with Natural Gas? |
HenryTo
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 Posted: Tue Dec 26, 2006 11:00 am Post subject: What is Up with Natural Gas? |
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Since our December 17th commentary was published ("What is Up with Natural Gas?"), natural gas prices (basis the January 2007 contract) are already down by more than $1/MMBtu.
The contract is way oversold but a solid bottom is still nowhere in sight. For now, I prefer to sit and wait on the sidelines before buying anything natural-gas related (regulated pipelines notwithstanding). Watch out for Canadian producers especially since I believe the Canadian dollar is still way overvalued.
Best,
Henry
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rffrydr
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| Posted: Sun Jan 24, 2010 8:30 pm Post subject: |
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Cold is holding breakout above $5 and good pop in face of dropping commodities.
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HenryTo
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| Posted: Sat Jan 23, 2010 11:15 am Post subject: |
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Rig counts still recovering:
http://online.wsj.com/article/BT-CO-20100122-709758.html?mod=WSJ_latestheadlines
| Quote: | The number of oil and gas rigs climbed to 1,282, up 34 from the previous week, according to data from oil-field services company Baker Hughes Inc. (BHI). The number of gas rigs was 833, an increase of 22 rigs from last week, while the oil rig count was 437, an increase of 12 rigs. The number of miscellaneous rigs was unchanged at 12 rigs.
The number of gas rigs in use peaked at 1,606 in September 2008. Producers cut natural-gas drilling sharply last year in response to falling prices, but the rig count has begun to recover in recent weeks as producers bet on colder winter weather and an economic recovery that would spark demand for the fuel.
Cold weather in the major gas-consuming regions in recent weeks has supported prices and put a substantial dent in inventories. Total gas in U.S. storage for the week ended Jan. 15 was 2.607 trillion cubic feet, in line with the five-year average and just above last year's level.
Natural gas for February delivery on the New York Mercantile Exchange was recently up 21.1 cents, or 3.76%, at $5.826 a million British thermal units. |
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rffrydr
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HenryTo
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| Posted: Sat Jan 16, 2010 10:25 pm Post subject: |
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A significant gas find in the Gulf of Mexico:
http://www.chron.com/disp/story.mpl/business/energy/6818577.html
| Quote: | A team led by New Orleans' McMoRan Exploration Co. said this week it made one of the biggest discoveries in the Gulf's shallow waters in decades.
The claim was based on results from a well, drilled in 20 feet of water to a depth of more than 28,000 feet, that found a 135-foot column of petroleum-rich rock at the Davy Jones prospect.
Additional drilling will be needed to confirm the well's true potential, but the team said the early results suggest, even beyond Davy Jones, there is plenty more oil and gas to be found in the deeply buried layers of sediment.
“Go back through the history of development in our business, and odds are, we've got more than one of these in front of us,” said John Schiller, CEO of Energy XXI, a Hamilton, Bermuda-based firm run from Houston that has a 16 percent stake in the project.
Industry analysts had predicted that ultradeep gas plays in the shallow-water Gulf of Mexico would contribute to U.S. natural gas supplies over time. But the Davy Jones discovery is likely to accelerate activity in the region.
Matt Snyder, lead analyst for Gulf of Mexico research at consulting firm Wood Mackenzie, had projected commercial production from the wells by 2017. Now, in light of the announcement, he said the firm will likely revise its forecast to 2014.
The additional output could help arrest steep declines in natural gas production in the Gulf of Mexico in recent years. Gas production from the basin today is roughly 7 billion cubic feet per day, about half what it was in 2001.
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Analysts with Jefferies Research this week estimated the Davy Jones discovery could contain some 2 trillion cubic feet of natural gas.
Partners in the project said the formation may even hold triple that, as well as other hydrocarbons. And they said it verified the presence of a major new exploration frontier that could yield much more oil and natural gas in coming years.
“It remains to be seen what this is going to do to total gas supply, but I would say it's pretty rare that you find one discovery by itself without other finds nearby,” said Matt Pickard, market analyst with Quest Offshore Resources in Sugar Land. |
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rffrydr
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rffrydr
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rffrydr
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rffrydr
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HenryTo
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| Posted: Sat Jan 09, 2010 2:27 am Post subject: |
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The number of natural gas rigs is recovering slowly, but surely. Also, note that UNG actually declined 1.89% to 10.41 yesterday, despite one of the worst cold snaps in U.S. history.
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NEW YORK (Dow Jones)--The number of rigs drilling for oil and gas in the U.S. climbed this week as producers brought rigs back to work in response to higher energy prices.
The number of oil and gas rigs rose to 1,220, up 31 from the previous week, according to data from oil-field services company Baker Hughes Inc. (BHI). The number of gas rigs was 781, a increase of 22 rigs from last week, while the oil rig count was 427, an increase of 9 rigs. The number of miscellaneous rigs was unchanged at 12 rigs.
The number of gas rigs in use peaked at 1,606 in September 2008. Producers had curbed natural-gas drilling sharply over the past several months in response to falling prices, but the rig count has begun to recover as cold winter weather drives up the demand for natural gas for heating. Front-month natural gas for delivery on the New York Mercantile Exchange shot above $6 a million British thermal units this week, the highest price since last January.
Gas supplies, however, remain ample. Total gas in U.S. storage for the week ended Jan. 1 was 3.123 trillion cubic feet--about 10% above last year's level and 11% above the five-year average.
Nymex natural gas for February delivery was recently down 10.3 cents, or 1.77%, at $5.703 a million British thermal units. |
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rffrydr
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| Posted: Thu Jan 07, 2010 10:54 am Post subject: |
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Cold doing its work:
Working gas in storage was 3,123 Bcf as of Friday, Jan. 1, 2010, according to EIA estimates. This corresponds to a net decline of 153 Bcf from the previous week. Stocks were 286 Bcf higher than last year at this time and 316 Bcf above the 5-year average of 2,807 Bcf, the EIA said.
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rffrydr
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| Posted: Mon Dec 14, 2009 10:21 am Post subject: |
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Exxon bets on....fossil fuels. Algea and now Nat Gas, 41billion XTO.
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rffrydr
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| Posted: Fri Dec 11, 2009 11:04 am Post subject: |
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Natural Gas Is the Way to Go
By Jim Cramer
RealMoney Columnist
12/10/2009 2:57 PM EST
| Quote: | Natural gas is not supposed to be going up. We have a glut. We have no place to put it. We aren't supposed to be drilling for it. The president favors clean coal over dirty natural gas. And the stuff is up huge, 40 cents today. Gigantic.
The drawdown we saw is a dream come true for Chesapeake Energy (CHK - commentary - Trade Now), Ultra Petroleum (UPL - commentary - Trade Now), Apache (APA - commentary - Trade Now), Devon Energy (DVN - commentary - Trade Now), which are among the names with the most at stake for this unusual run. It's interesting to see the run extend to the drillers -- remember oil's not the driver today -- even if some drilling-sector components, like National Oilwell Varco (NOV - commentary - Trade Now), have very little exposure to this market.
Last night I had on the CEO of Inergy (NRGY - commentary - Trade Now), who has just developed the first new storage facility of any size for natural gas. That's important because this stuff can't really go up as long as it is being pumped but can't be stored. You have a ridiculous supply issue, so unlike the one that Dan Dicker brilliantly describes in his ETF-sucker contango piece over on the flagship site.
You know I like this group because of what I sense will be a populist groundswell about it. Despite the president's tone-deafness about natural gas, the plentiful nature of it, amid the coming tough EPA stewardship about coal, could make it so that the new coal-fired power plants on the books come off the books, and the old coal power plants are retired faster than people think.
The main problems with natural gas -- it is where people aren't and, of course, the storage issue -- are getting solved. Last night, Honeywell (HON - commentary - Trade Now) talked about how it has technology to go with pipelines to make natural gas a more efficient fuel. Inergy says there is more storage on the way.
These natural-gas stocks are actually MORE important to the OIH (OIH - commentary - Trade Now) than anything else. The fact that it can rally can rally the market in the face of the weakness in oil.
Worth focusing on.
And again, go to Dicker's piece. It is brilliant. |
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rffrydr
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| Posted: Mon Dec 07, 2009 10:45 am Post subject: |
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Rising bearishness in UK--despite Ute rollout:
http://ftalphaville.ft.com/blog/2009/12/07/87326/more-uk-natgas-glut-talk/
This against a bloomberg piece talking up the LNG distribution to rual china of LNP in a deal just signed between HK and PetroChina. May a million steel tanks bloom!
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nodoodahs
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| Posted: Sat Dec 05, 2009 7:20 am Post subject: |
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Yes, dozens of ways to skin the cat, that's a good thing to remember.
We got snow here yesterday afternoon, before the ground was cold enough for it to stick. Overnight got a good freeze, about 20 F on the back porch when I woke up, our property's in a valley that gets a few F colder than the weather channel thinks it's supposed to.
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rffrydr
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| Posted: Fri Dec 04, 2009 11:57 pm Post subject: |
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| nodoodahs wrote: |
If you had enough money to really diversify, you could play all the commodes profitably based only on roll yield and loss.
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They have. And are doing so. To the point of destroying the most fundamental of fundamentals. In technical parlance, all moving averages lead to gap city. 
| Quote: | ....The curious thing is what that says about the current state of the market, according to Olivier Jakob of Petromatrix.
As he noted on Monday, we now seem to be at a point where product values are being determined by refinery terminal shutdowns rather than by demand.
This is largely down to the fact that cheap floating storage has been carrying the industry for most of the year. As Jakob explains, many of these shutdowns would probably have occurred much earlier had refineries not had the means to disguise their difficulties by producing directly for floating distillate stocks. |
http://ftalphaville.ft.com/blog/2009/11/23/84711/why-refinery-shutdowns-matter/
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