5 Reasons Why the Price of NatGas May Be Ready to Bounce Higher
As we reported yesterday, the price of natural gas continues to bump along in the mid-$2/MMBtu range (see NYMEX Futures Price Hits 21-Month Low, Settles at $2.68/MMBtu). Warm weather both here and in Europe, along with a slight increase in production (5% higher now than it was a year ago), have combined to deliver low commodity prices for natgas. However, a Zacks analyst writes that even though natgas is “beaten down,” we may be on the cusp of “a multi-week rally” in the price. He lists five signs/reasons why natgas prices are due to turn around.
Read More “5 Reasons Why the Price of NatGas May Be Ready to Bounce Higher”
The mighty BP (formerly British Petroleum) is an oil and natural gas company trying to convert itself into a renewable energy company. We’d say they’re failing, big time. BP has gone screwy. It’s a European company and has bought into the false narrative that fossil energy is on the way out due to concerns over mythical global warming. In BP’s recently published Annual Energy Outlook for 2023 (full copy below), the company predicts (once again) that fossil energy is on the way out, but now it’s happening even faster than before because of (a) Putin’s war on Ukraine, forcing Europe to adopt unreliable renewables even quicker than before, and (b) Biden’s so-called Inflation Reduction Act, pouring billions into the effort to smash fossil energy and elevate electric-everything.
Leftist top-down bureaucracies never work. NEVER. Socialism never works. Communism never works (at least in the long term). They all spring from the same poisoned root–arrogant elitists believe they know better than you how to run your life. They extinguish freedom. Example: The Bidenistas want to make decisions for you about which forms of energy you can and can’t use. They dream about a future where dirty, filthy fossil energy is no more. And they allocate trillions of dollars to make it happen. Then what happens? These egg-headed toads sit around and talk about it–and NEVER distribute the money! They hold endless Zoom calls. They require grant forms filled out in triplicate. And then, no money gets distributed. Welcome to Bidentopia.
NATIONAL: The billionaires behind the gas bans; Highest paying engineering jobs of 2023; North Hudson launches $275 million energy credit fund; INTERNATIONAL: Shell is selling ‘carbon neutral’ fossil fuels again.
Last week a “suspicious item” was found at a natural gas transmission facility in Fallowfield Township in Washington County, PA. It looked like a bomb, an “improvised homemade” device, and was placed into the door of an industrial pipe at the Eastern Gas Transmission facility. The PA State Police and FBI responded to investigate. They later determined it was not explosive, and they removed it. But it certainly looked like it was explosive (i.e. a bomb), which is why they responded.
This is getting painful. Are we beginning to settle into “lower for longer” once again, with natural gas prices trading in the $2-$3 range? Gosh, we sure hope not. Yesterday was the first full day of the March 2023 NYMEX futures contract for natural gas as the “front month.” The February contract “rolled off” (i.e. ended) last Friday, and yesterday the March contract became the new contract that functions as the default price for the NYMEX. And it settled at $2.677 per million BTUs (MMBtu). Once again, warm weather is the main factor cited for the low price. Here’s a question: How did we go from almost $10/MMBtu gas and one of the tightest, most volatile markets in over a decade, to sub-$3/MMBtu gas and one of the most bearish scenarios seen in a long time–all in the span of just six months? We have some answers below.
The number crunchers at the U.S. Energy Information Administration (EIA) have analyzed proved reserves data for 2021 (the most recent year available) and have determined that proved reserves soared, up by 32% from the previous year. Why? Five of the eight states with the most proved reserves of natural gas each reported new record volumes, driving the growth nationally. And one of those five is a Marcellus/Utica state: West Virginia.
Two weeks ago, the Pennsylvania Senate Majority Policy Committee held a public hearing on energy access and affordability. As part of that hearing, Marcellus Shale Coalition president Dave Callahan gave testimony that a problem we’ve highlighted for years is still out of control. The state Dept. of Environmental Protection (DEP) (a) takes WAY too long to issue new permits for shale projects, (b) when it does issue permits, it is inconsistent in the standards used, depending on which area of the state, and (c) the ongoing permit delays and inconsistency are costing the state jobs.
CNX Resources CEO Nick DeIuliis is on a mission to reduce the number of outstanding shares of his company’s stock by buying back shares. The aim is to return value to shareholders. When a company buys back shares, it reduces the overall number of outstanding shares, which boosts the price for the remaining shares. In effect, DeIuliis is causing share prices to rise, putting money (and profits) into the pockets of shareholders. Since the third quarter of 2020, CNX has repurchased and retired 24% of the company’s outstanding shares of stock–one of the four top companies in the S&P 500 to do so.
It’s earnings season, the time when publicly traded companies publish their latest quarterly (and in this case, annual) financial statements–for 4Q22 and all of 2022. Three of the biggest oilfield services (OFS) companies in the world–SLB (formerly Schlumberger), Halliburton, and Baker Hughes–have now issued their quarterly updates. And all three have a common theme: Expect more drilling internationally in 2023, especially in the Middle East and Latin America, but expect about the same amount of drilling (or less) in the U.S. this year.
We spotted an interesting article that says hydrogen (and its derivatives, including ammonia and methanol) are “tilting toward export markets” and that there is a link between hydrogen exports and the production of natural gas. Yeah, we didn’t know that hydrogen is getting exported, either. And while we know that 95% of all hydrogen today comes from cracking natural gas, we didn’t know there is a “link” between hydrogen exports and natgas production. We were intrigued…
We love West Virginia. The state continues to fight the good fight against those who insist on trying to defund fossil energy companies. WV’s latest target is the two proxy advisory services, Glass Lewis and International Shareholder Services (ISS), that control some 90% of all corporate proxy voting in the U.S. WV is advancing a new bill, at the prompting of State Treasurer Riley Moore, that the state (including its massive pension fund) will not do business with proxy services that use ESG (environment, social, governance) as a litmus test for how to invest. States like WV (and Florida, and Texas) are changing the game–having an impact.