Commodity Price

Commodity Price | Economic Impact | Industrywide Issues

Marcellus Will Produce More Supply than Demand in NE – This Summer!
May 23, 2013May 23, 2013

A shocking observation from RBN Energy founder Rusty Braziel that he made last week at the Bentek Benposium event in Houston: Northeast demand for natural gas will be almost entirely met from local Marcellus production in the coming years. Starting this summer, the region will produce more supply than total demand! Implication? “Significant re-plumbing of the US natural gas pipeline distribution system will be needed.” That re-plumbing is already underway.

Rusty describes how production forecasts from just two years ago (2011) are wrong–way wrong, on the low side–because of the super-producing Marcellus Shale:
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Commodity Price | Exporting | Industrywide Issues | Research

Bipartisan Policy Center: U.S. NatGas Prices Will Stay Low
May 21, 2013May 21, 2013

It seems as if everyone is hauling out their crystal balls to try and divine where the price of natural gas will go in both the short and long term–and they all pretty much say the same thing: The price won’t go much higher for a long time–even if demand really picks up and even if the U.S. starts exporting natgas. The latest organization to take a stab at the prediction game is the Bipartisan Policy Center (BPC), a Washington, D.C. based organization founded by liberal Democrats and moderate Republicans (mainstream media’s definition of bipartisanship).

The BPC’s Energy Project staff released a new report yesterday titled “New Dynamics of the U.S. Natural Gas Market” (full copy embedded below). The key findings of the study will not make the anti-drilling nutters happy, that’s for sure:
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Commodity Price | Economic Impact | Hydraulic Fracturing | Industrywide Issues | Research

Moody’s Report: Shale is Here to Stay, Gives U.S. Huge Advantage
May 15, 2013

A 16-page, $550 report from Moody’s Investors Service released on Monday says shale drilling in the U.S. is here to stay, gives America an ongoing advantage over Read More “Moody’s Report: Shale is Here to Stay, Gives U.S. Huge Advantage”
Commodity Price | Exporting | Industrywide Issues | Statewide WV | West Virginia

WVU Spring NatGas Conference: $4-$6 Gas for Next "Decade or More"
April 25, 2013April 25, 2013

Several interesting speakers addressed the spring natural gas conference held by West Virginia University in Morgantown on Wednesday. Among them was keynote speaker David McCurdy, president and CEO of the American Gas Association. He told attendees he believes natural gas will stay in the $4-$6 per Mcf range “for a decade or more.”

Dominion Resources was also on hand, talking about their plan to export natural gas to Japan and India from Cove Point, MD. Highlights:

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Commodity Price | Industrywide Issues

One Year Later: NatGas Inventories & Rig Counts Down, Price Up 2X
April 4, 2013April 4, 2013

MDN’s favorite Seeking Alpha blogger and energy analyst, Richard Zeits, has posted a top-notch analysis about the price of natural gas and where he believes it’s headed—and why. The article is extensive and well worth the time to read it if you care about the price of natural gas. He points out “what a difference a year makes,” noting that in just one year natural gas inventory surpluses are gone (even contracting), rig counts are at their lowest numbers in decades, and the price of natural gas has doubled from a low of $2 MMBtu to near $4 MMBtu. Surprisingly, he notes that recent supply numbers for natural gas show a slight contraction overall, despite the huge expansion of production in the Marcellus, Utica and Bakken.

Zeits says the fundaments for natural gas trading look very good. He makes the following points in the article:

Read More “One Year Later: NatGas Inventories & Rig Counts Down, Price Up 2X”
Commodity Price | Electrical Generation | Industrywide Issues

NatGas Prices Inching Higher, $4 Mcf This Summer?
March 15, 2013March 15, 2013

This is not a story about the Marcellus/Utica per se, but it has a direct bearing on landowners (how big their royalty checks are) and the drilling industry (whether or not they’re willing to sink a hole) in Appalachia.

The enormous success of the shale drilling industry has been its own worst enemy in one respect: Demand for natural gas as not kept pace with the enormous flood of new supplies, and that has led to a commodity price “collapse” since 2011. Even though domestic supplies of natural gas are now at an all-time high, prices are once again inching up and it’s expected the commodity price will hit $4 per thousand cubic feet (Mcf) sometime this year—perhaps this summer. Why? The switch from coal to natgas in electric power generating plants…

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Access Midstream Partners | Blue Racer Midstream | Commodity Price | Dominion Energy | Energy Services | Ethane | Industrywide Issues | Ohio | Pipelines | Processing Plants | Statewide OH

Live from Columbus, OH… Utica Shale Confab – Day 1
February 27, 2013February 27, 2013

MDN editor Jim Willis is in Columbus, Ohio attending the 2nd Utica Shale Development & Growth Forum. Jim is moderating a panel today (Wednesday) called “Utica from the Media’s Perspective.” On the panel with me are Bob Downing, staff writer with the Akron Beacon Journal, Rick Stouffer, editor of Platts Gas Business Briefing, and Peter Behr, reporter with EnergyWire. All top notch writers from premier publications. I feel honored to sit on a panel with them!

Yesterday (Tuesday) was the first day of the main program and speakers tackled the Utica Shale from their unique perspectives. We heard from the relatively new Access Midstream (formerly Chesapeake Midstream); a geologist; Blue Racer Midstream; and an economist who is head of the Ohio State University’s Sub Surface Energy Resource Center (“Utica Shale Center” for short). Since most MDN readers couldn’t be here, I took good notes to pass along. Below are highlights and interesting tidbits from Day One…

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Commodity Price | Industrywide Issues

What’s the Break-Even Price of Marcellus NatGas for Drillers?
February 1, 2013February 6, 2013

Another stellar column from Seeking Alpha blogger and energy analyst Richard Zeits—this one delving into the thorny topic of, “At what natural gas commodity price is it profitable for a driller to continue drilling?” In particular, at what price in the Marcellus Shale.

His column begins this way:

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Commodity Price | Industrywide Issues

Marcellus NatGas Production Predicted to Increase 44% by 2014
January 24, 2013January 24, 2013

The perennial topic of conversation around the natural gas water cooler is, “How much supply will there be in the next X timeframe, and how will that affect the price of natural gas?”

Financial advisory firm Raymond James is the latest to weigh in with their thinking on the topic, and it’s no surprise the Marcellus Shale figures big in their thinking about how much supply is coming down the pipeline, and how prices will be affected:

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Commodity Price | Industrywide Issues | Pennsylvania | Research | Statewide PA | Statewide WV | West Virginia

Marcellus Shale’s Prominent Role in Latest EIA Outlook
January 9, 2013January 9, 2013

Yesterday the U.S. Energy Information Administration (EIA) released their monthly Short-Term Energy Outlook (STEO), which includes the outlook for natural gas. EIA has some of the best and brightest that crunch the numbers, so when they issue their reports, people pay attention. EIA reports are not exactly a crystal ball to predict the future—but they’re darned close.

The Marcellus Shale of Pennsylvania and West Virginia is mentioned prominently in this update, including its predicted role in boosting overall natural gas production this year. Below is the natural gas portion of the STEO, with predictions for prices, production and consumption in 2013:

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Commodity Price | Crude Oil | Economic Impact | Exporting | Industrywide Issues | NGLs

Rusty Braziel Sketches Scenarios for U.S. NGL/Crude Prices
December 5, 2012December 5, 2012

Russell (“Rusty”) Braziel is one of the country’s most respected authorities on energy information and markets. He’s the former vice president of BENTEK Energy (bought out by Platts in 2010). He speaks, he writes, and he’s now President & Principal Consultant at RBN Energy, LLC.

Rusty presented at the LDC NGL (natural gas liquids) Forum in San Antonio yesterday, and he had some interesting things to say about the future of NGL and crude oil prices in the U.S. When Rusty speaks, people listen.

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Commodity Price | Industrywide Issues | M&A

3Q12 M&A Deals in the Marcellus Fall to Zero
November 27, 2012November 27, 2012

For the past five years one of the key indicators that the Marcellus Shale has been red hot is the level of mergers and acquisitions (M&A) activity among energy companies. That is, companies doing deals to work together, or to buy outright, leased acreage, drilling operations or pipelines and other infrastructure. For the first time in several years, there was no significant M&A activity for an entire 3-month period (third quarter 2012) in the Marcellus, according to PricewaterhouseCoopers, a consulting and research firm that tracks it.

What, exactly, does that mean?

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Commodity Price | Hydraulic Fracturing | Industrywide Issues | Regulation

Deloitte Survey: NatGas Price >$3 in 2013, Oil Price <$100
November 15, 2012November 15, 2012

Consulting firm Deloitte recently completed a survey of 250 oil and gas professionals on their expert opinions about where they believe the energy industry is headed in the near and long-term. Among their findings: The U.S. will soon become completely energy self-sufficient for natural gas, but we’ll always need to import at least some oil.

Looking at 2013, a majority of those surveyed (60%) believe the commodity price of natural gas will average more than $3 per million Btus for the year, and a majority (59%) think crude oil will stay below $100 per barrel next year. Attitudes about regulation of fracking is also interesting: 49% think existing regulations of fracking is “just right” or “on track.”

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BP | Commodity Price | Energy Companies | Ethane | Industrywide Issues | NGLs

Industry Expert Says NGL Prices are Headed Down
November 15, 2012November 15, 2012

Dawn Constantin, head of partnerships and analytics at BP plc, spoke at the LDC Gas Forum in Toronto earlier this week about what the future holds for the natural gas liquids (NGLs) market. Her analysis? Drillers who thought NGLs (wet gas) were a safe harbor against the low price of methane (dry gas) may not find it so safe after all. Why? Simple economics of supply and demand. Demand for NGLs is not keeping up with the flood of supply coming from places like the Marcellus and Utica Shale.

Constantin said there now exists downward pressure on the price of NGLs, just like there is for dry gas:

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Anti-Drilling/Fossil Fuel | Commodity Price | Industrywide Issues

Bloomberg Says NatGas Producers “Killing” Gas Price Rally
November 14, 2012November 14, 2012

It’s been at least two weeks without a natural gas hit piece from Bloomberg (they had to leave the natgas topic alone for a few weeks to get their candidate re-elected)…must be time for another smear. Yep, here it is: “Gas Prices Doomed to Stay Low as Producers Pump Faster.” The premise is that because gas prices have started to climb again, the capitalistic, selfish energy companies are greedily turning back on “shut-in” wells and hooking up previously drilled wells and the gas is now flowing so darned much, it’s doomed gas prices to stay low, like, forever.

Never mind that next week Bloomberg will run another story that says these same energy companies are vastly overstating how much shale gas really exists and supplies will run out in a few years—that we don’t really have 100 or more years of supplies as most experts believe. Being a bit truth-challenged has never bothered Bloomberg, or Reuters or the AP for that matter. They have a template, a narrative—and the “facts” will be bent, molded and shaped to fit it.

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Commodity Price | Economic Impact | Industrywide Issues

Energy Industry Expert Says Shale Gas Will Last <10 Years
November 9, 2012November 9, 2012

Here’s a contrary view if ever we’ve seen one: Bill Powers, editor and writer of the Powers Energy Investor newsletter and someone who has sat on the board of three oil and gas companies and has been an active investor for 25 years, says shale gas supplies in the U.S. have been vastly overhyped. Over the past three years Powers researched and next spring will publish a new book called: Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth. In the book he argues that contrary to the popular belief that the U.S. has a 100-year supply of natural gas due to shale gas fracking, he believes it’s more on the order of 5-7 years. Say what??

Powers was interviewed by The Energy Report and the interview was posted on the Seeking Alpha website. Here’s a brief excerpt:

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