Word: gas
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...demand for gas, despite its low price, stays relatively low. Then layer on the effects of the recession: gas-intensive industrial production is down 12.8% since this time last year, according to Barclays Capital bank estimates. On top of that, there's weather: this has been a cool summer in much of the U.S., so less natural gas has been burned for electricity to power air-conditioning than in recent years. (Read "America's Untapped Energy Resource: Boosting Efficiency...
...supply side, gas output from drilling has been much greater than anticipated, leading to a surplus that has deflated prices. This in turn has made many drilling operations unprofitable. The number of natural gas rigs operating in the U.S. has fallen well over 50% in the past year, according to EIA data. Because a given well's output decreases over time, producers need to drill new wells continually to keep up production. Thus, the falling rig count raises concern about the longer-term-supply outlook...
...though, there is abundant gas and limited capacity for storage. The U.S. is on track to store 3.8 to 4.0 trillion cu. ft. this year. The contiguous U.S. has never put more than 3.6 trillion cu. ft. of gas in storage...
Take no comfort in that excess. Unlike crude, natural gas cannot be stored just anywhere we want; we also cannot transport it very easily. Gas is typically stored in underground reservoirs. The pressure of the gas and the type of reservoir can make injection and extraction cycles difficult and lengthy processes. Until traders see extra storage realized, the natural gas market will be priced in steep contango, meaning prices of natural gas for future delivery will hang far above the current price. The low prices now represent the abundance of unusable and potentially unstorable gas, a situation that will...
Producers who cannot sell or store their gas will have limited options: cap their wells, which could be bad for them in the long term; give gas away for free, which has happened before when producers did not want to halt production; or flare it - burn it off into the atmosphere. With production decreasing because of low price incentives and a great deal of gas likely being lost from capping wells and flaring gas, the oversupply will not last, and the price will be pushed higher by supply and demand fundamentals. The natural gas futures traded on the New York...