Don't Bet on Natural Gas Recovery Just YetLocation: Tokyo Crude oil and natural gas have posted a spectacular divergence in 09.
This is the biggest divergence in the history of the two products in the US
in a single year. Shale gas production in the Unites States, due to higher prices and new technology, caused U.S. domestic supply to grow rapidly, to all-time record levels. At the same time, the capacity to import liquefied natural gas (LNG) into the United States was expanded to fill the expected gap from the decline in U.S. production. Now LNG has become a significant supply threat to North American producers during the summer months. With regard to Shale gas production, here is a quote from Schlumberger: The challenge is to release it from rock as impermeable as concrete. The
prolific Barnett Shale in the Fort Worth basin covers much of North Central
Texas, but organically rich shales are also present in the mature Illinois,
Michigan, and Appalachian basins. Recent advances in drilling and
completions (coiled tubing, Well, "higher gas prices" no more. Natural gas supplies in the US are now at record levels. There are numerous highly levered firms that bet heavily on natural gas recovery that are now struggling. From the WSJ: natural gas supply in the US US Natural Gas Futures Curve (NYMEX Henry Hub) This briefing is provided as general information, and does not constitute definitive advice or recommendations. Any views expressed in the above articles are those of the author concerned and do not necessarily reflect the views of RiskCenter or any other party. Please send any comments or queries to feedback@soberlook.com.
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