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Natural gas tumbles after inventory number

  • The EIA minutes ago reported an inventory build of 110 bcf vs. expectations for an increase of 102. Flat ahead of the print, August natural gas futures are off 2.2% to $4.469.
  • UNG -2.3%
  • ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, KOLD, UNL, NAGS, DCNG
Comments (6)
  • wigit5
    , contributor
    Comments (4101) | Send Message
     
    At these prices some gas to coal switching should take place especially out west/mid-west. Will be interesting to see how the demand situation works out over the next 3 years.
    26 Jun, 10:51 AM Reply Like
  • Wise Timmy
    , contributor
    Comments (298) | Send Message
     
    There might be some shifting with companies that have thought ahead and built dual fuel gas/coal plants, but I think the bigger move longer term will be in electricity rates. They will be going up because the all-coal plants are being closed and tore down while the reliance on alternative sources of energy (which are intermittent) will put stress on the grid.
    26 Jun, 11:02 AM Reply Like
  • wigit5
    , contributor
    Comments (4101) | Send Message
     
    Agreed, most of the coal plants being shut down are older less efficient ones. You have a point though power prices will likely rise over the term (adjusting for inflation of course). I think eventually alternatives will break through but it's likely 50 years at least before we can rely mostly on them. Coal/natgas/nukes will retain lions share for a long time.
    26 Jun, 11:14 AM Reply Like
  • maxskimr@gmail.com
    , contributor
    Comments (8) | Send Message
     
    What investors do not realize in the reported changes to natural gas reserves each week is that there were 3300 natural gas wells waiting to be placed on pipeline distribution as of a couple of months ago according to reports from this service, these facts having been forgotten. Each week many of these should be online. The other fact influencing the rapid restoring of gas reserves is the fact that Kinder-Morgan reversed one of its Tennessee Gas Transmission pipelines several months ago so that Marcella-Utica gas can now flow south to Gulf Coast reservoirs, users, and to Mexico. The rebuilding of reserves should now be completed long before it has been estimated to happen by this service.
    A. Peabody (retired oil & gas operator)
    26 Jun, 01:12 PM Reply Like
  • ILuvMath
    , contributor
    Comments (3) | Send Message
     
    WRT your "3300 natural gas wells" comment, how long does it take to get them from their current state to fully productivity? My understanding was that even though a well has been dug, you still need to hire a crew to setup and man a rig - a process that typically takes between 3 - 6 months.

     

    Secondly, what is the breakeven cost for these wells?

     

    Thanks!
    8 Jul, 01:04 PM Reply Like
  • maxskimr@gmail.com
    , contributor
    Comments (8) | Send Message
     
    I was an oil & gas operator for many years and an investor in other O&G operations as well. I own mineral rights and royalties in Louisiana, Colorado, Pennsylvania and Mississippi.
    26 Jun, 01:12 PM Reply Like
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