The Natural Gas Price Watch Thread

hardtootell-2 · **Posted:** Tue Sep 15, 2009 7:18 pm

OilFinder2 wrote:

Does anyone besides me think the natural gas price has gone a bit blinky in the past several days?

But I'm sure Maddog is crossing his fingers it's real.

Call me a doomer (cause I am) but I have not trusted the markets to be efficent or honest since that day last fall when the gubbermint issued

http://www.sec.gov/rules/other/2008/34-58592.pdf

This is proof positive that the markets are overtly rigged. In a nation that sanctions preemptive war and torture, it does not take much imagination to realize that a lot is probably going on covertly as well.

Maddog78 · **Joined:** Mon Jul 14, 2008 12:00 am **Posts:** 1083

I'm crossing my fingers but I don't think it is real.
Until we get some cold weather and a noticeable burn off of storage, I think this is all market manipulation.

Maddog78 · **Joined:** Mon Jul 14, 2008 12:00 am **Posts:** 1083

Up to 3.77 as I type this. It's been a crazy couple of days.
Doesn't make sense based on the supply situation. I guess people are speculating useage will pick up significantly this winter.

hardtootell-2 · **Posted:** Wed Sep 16, 2009 1:03 pm

Maddog. Why don't you believe the evidence before you? If there is no rhyme or reason, it is probably someone's crap game. Little fish like you and I are just collateral damage when it moves dramatically against us. Gapping up or down 10% in a day...

TheAntiDoomer · **Joined:** Wed Jun 18, 2008 12:00 am **Posts:** 575

hardtootell-2 wrote:

Maddog. Why don't you believe the evidence before you? If there is no rhyme or reason, it is probably someone's crap game. Little fish like you and I are just collateral damage when it moves dramatically against us. Gapping up or down 10% in a day...

bite your tounge hardtotell, maddog is no little fish, he's a whale in the natural gas world!

Maddog78 · **Joined:** Mon Jul 14, 2008 12:00 am **Posts:** 1083

Ha, well, I appreciate the props, TheAntiDoomer.

I'm pretty good at drilling for and producing the stuff but when it comes to the spot market side of it, I'm sure I'm just as much a fish out of water as the next guy.

OilFinder2 · **Posted:** Wed Sep 16, 2009 9:40 pm

Long write-up on Seeking Alpha from Tuesday at the link. Sounds like some funny trading stuff going on:
>>> LINK <<<

Maddog78 · **Joined:** Mon Jul 14, 2008 12:00 am **Posts:** 1083

Also an interesting read on Rigzone today.

http://www.rigzone.com/news/article.asp?hpf=1&a_id=80369

Quote:

Is Resolution of Natural Gas Conundrum About to Emerge?

The scary part ;

Quote:

As people involved in the domestic natural gas business know, government regulation in response to then current perceptions of the health of the market at any point in time shapes the future of the gas business.

Maddog78 · **Joined:** Mon Jul 14, 2008 12:00 am **Posts:** 1083

Inventories rose 1 billion less than forecast so the price went up a bit.
It's 3.87 as I type this, up a penny.
Interesting, especially since crude is down over 2 1/2 bucks.

http://www.bloomberg.com/apps/news?pid=20602099&sid=acz1bScDJ76E

Quote:

Natural Gas Futures Rise After Report of U.S. Stockpile Gain

By Reg Curren

Sept. 24 (Bloomberg) -- Natural gas futures rose in New York after a government report showed U.S. supplies advanced within the range forecast by analysts.

Inventories rose 67 billion cubic feet in the week ended Sept. 18 to 3.525 trillion cubic feet, the Energy Department said. Analysts expected a stockpile increase of 68 billion cubic feet, according to the median of 22 estimates compiled by Bloomberg. A similar increase in next week’s report would put stockpiles at an all-time high.

Natural gas for October delivery ROSE 4.4 cents, or 1.1 percent, to $3.904 per million Btu at 10:56 a.m. on the New York Mercantile Exchange. The fuel was trading at $3.774 before the report was released at 10:30 a.m. in Washington.

The five-year average supply increase for the week is 69 billion cubic feet.

Edit: 3.99 now. Could we see 4 bucks today? Doesn't make sense but maybe.

OilFinder2 · **Posted:** Thu Sep 24, 2009 8:44 pm

It's at $4.02 in overnight trading as I write this.

I'm fairly convinced this run-up is mostly a short squeeze.

I wouldn't mind seeing it go down to $1, just for the entertainment value.

But not for too long, we don't want Maddog to lose his job.

Maddog78 · **Joined:** Mon Jul 14, 2008 12:00 am **Posts:** 1083

Thanks but I think if it went to a dollar even for a short time, it would probably scare our bean counters enough that I'd be done. :shock:

kiwichick · **Posted:** Fri Oct 16, 2009 12:53 pm

nat gas to $4.7

up 6%

TheAntiDoomer · **Joined:** Wed Jun 18, 2008 12:00 am **Posts:** 575

^it was at 5 for a while then dropped to 4.5 now at 4.7. However if the caverns fill up as expected and gas is dumped on the market the price could drop to 2$!

Homesteader · **Posted:** Fri Oct 16, 2009 9:20 pm

"Running down the depletion numbers on shale gas, analyst Arthur Berman found that in the first year of production decline rates have been in excess of 50% for Barnett wells, and 90-95% for Haynesville Shale wells. The average well in the Fayetteville Shale is "profoundly non-commercial" he said, and predicted that most shale gas wells will be abandoned in less than five years after their first production because the output will be so low.

There is also a fear, which I have articulated previously, that with an average production cost of $7-8/Mcf for shale gas and prices through most of 2009 staying around $4 or less, new wells simply haven't been getting drilled."

Link: http://www.energyandcapital.com/article ... utlook/975

Maddog78 · **Joined:** Mon Jul 14, 2008 12:00 am **Posts:** 1083

Berman's study has been discussed in several other threads.

A quick sum up. He did not have all the data, only a few wells and certainly not the best ones, plus his production costs are way too high especially in this current slump where service providers have cut their fees drastically.

The Natural Gas Price Watch Thread

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