Commodity Price

Forbes has an article saying the commodity price for natural gas, which was at historic lows earlier this year, will go above $4 per thousand cubic feet (mcf) by the end of this year. The current price as of this writing is $2.87 mcf.

Here’s their argument (based on analysis by Canaccord) in favor of a big upswing in natural gas prices:

Read More “Analyst Predicts NatGas Price Will be $4 MCF by Year’s End”

Each month the U.S. Energy Information Administration (EIA) publishes a Short-Term Energy Outlook. EIA researchers crunch the numbers, analyze the trends, and haul out the EIA crystal ball to predict what will happen in the next 12 months.

Here’s the section where they talk about natural gas supply, demand and prices they expect over the next year:

Read More “EIA Short-Term Prediction for 2013: NatGas Avg $3.34 Mmbtu”

Energy industry consultant and investment analyst Richard Zeits writes on the Seeking Alpha website about the U.S. Energy Information Administration’s latest natural gas production statistics released on Friday. He observes that natural gas production in May and June for the lower 48 states remained virtually unchanged. Which means the commodity price for natural gas is likely not going up any time soon. Huge quantities of supply with the same demand equals low prices—Econ 101.

Read More “Latest EIA Numbers Show NatGas Production Still High”

Since the beginning of 2012, hardly a quarterly earnings/operations report from an energy company, nor a story about natural prices, has failed to point out how drillers are now focused on “wet gas” areas in shale plays. For the Marcellus and Utica region, that means a shift from drilling in northeast PA to southwest PA, northern WV and eastern Ohio, where wet gas  deposits are found. Wet gas simply means there are extra hydrocarbons that come out of the bore hole along with “dry gas,” i.e. methane. Wet gas hydrocarbons include propane and ethane.

A story in today’s Pittsburgh Post-Gazette chronicles the rapid drop in the commodity price for both propane and ethane because of increasing supplies from shale gas drilling. It feels like the dry gas price story all over again. Too much supply, not enough demand.

Read More “Is Wet Gas Following Dry Gas Over a Price Cliff?”

The Gulf of Mexico has traditionally been a big source for both oil and natural gas for the U.S. When hurricanes blow through the Gulf and shut down oil and gas rigs, the markets always respond. That is, until now.

Even though Hurricane Isaac took an eerily similar path to Katrina (from 2005), and although nearly 3/4 of natural gas production coming from rigs in the Gulf was “shut-in” (or stopped, in lay terms), how did the markets respond? Gas futures prices went up 2%—hardly a blip. Why? Because of an abundance of shale gas—including (particularly) an abundant supply of shale gas from the Marcellus.

Read More “Importance of Off-Shore Gas Decreases with Rise of Shale Gas”

Natural Gas Intelligence (NGI) reports the price of natural gas in the U.S. made impressive gains last month—all except for the price of Marcellus Shale natural gas, that is. According to a press release announcing the results of “bidweek,” the once a month pricing the industry uses to set prices that many buyers and sellers of natural use for the coming month, infrastructure constraints (lack of pipelines) in the Marcellus are pushing prices lower as gas supplies bottleneck in the region. More supply sitting around, lower prices. Simple economics.

Below is the press release from NGI talking about the latest price news. Near the bottom is a link to a video where you’ll find the voice of a certain MDN blogger interviewing price expert Pat Rau. Give it a watch/listen.

Read More “U.S. NatGas Prices Go Up, Except for the Marcellus”