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Natural gas is threatening $4/MBTUs for the first time in 17 months as winter has shown no sign...

Natural gas is threatening $4/MBTUs for the first time in 17 months as winter has shown no sign of exiting and MDA Weather Services is predicting lower-than-normal temps for most of the country for the rest of the month. "We could see three more weeks of (storage) withdrawals" at a time when most are positioned for additions, says an analyst. UNG +2.5%.
Comments (9)
  • wigit5
    , contributor
    Comments (4183) | Send Message
     
    Nat Gas companies can start breathing a little bit better.
    18 Mar 2013, 10:33 AM Reply Like
  • KimFeil
    , contributor
    Comments (79) | Send Message
     
    The drilling treadmill will loose its steam as the hyperbolic production decline curves start to show themselves...the more we drill, the less production...hmmmn someone needs to tell Obama bout’ that before we start signing all these LNG export contracts.
    18 Mar 2013, 10:47 AM Reply Like
  • Thomas903
    , contributor
    Comments (121) | Send Message
     
    @KimFell - Due to low gas prices, the big shale operators are focusing their production efforts on oil and natural gas liquids.  The natural gas reserves aren't going away and the technology to recover them won't be forgotten, so there is no reason to expect significantly higher natural gas prices in coming decades.  Don't predict that a 6-month trend will last forever.
    18 Mar 2013, 02:42 PM Reply Like
  • dryoni
    , contributor
    Comments (4) | Send Message
     
    At the end of the day, the last year has demonstrated that unless E+P cos. can turn a profit they will leave the gas in the ground. The question then becomes how quickly they can ramp up production again once the spot price rises to profitability. I'm guessing there will be a significant time lag and with more cold weather in the forecast, I think we can see spot prices another 10-15% higher before the start of injection season and higher still if the rig count fails to climb this summer.
    18 Mar 2013, 03:46 PM Reply Like
  • wigit5
    , contributor
    Comments (4183) | Send Message
     
    SA's link title is "Groundhog blows it..."

     

    That poor species is expected every year (year after year) to do what billions of dollars and education for weathermen could not achieve... see if you could do that and not crack!
    18 Mar 2013, 01:46 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    NG longs to $4 level was the contrarian play - there were many shorts. Plenty of this move has been short covering. Will be telling whether we can clear $4 or if this is resistance, as the shorts finish covering.
    18 Mar 2013, 01:59 PM Reply Like
  • BTM
    , contributor
    Comments (402) | Send Message
     
    I think you may be right. However in the medium term, I think NG goes higher slowly but surely.
    18 Mar 2013, 03:53 PM Reply Like
  • eagle1003
    , contributor
    Comments (1628) | Send Message
     
    Whitehawk: "Plenty of this move has been short covering". You sure about that? I respectfully disagree. The current rally has motored almost non stop from $3.20 to $3.90. A move of that magnitude could only be primarily demand driven. Anyway, who in their right mind would have shorted NG when the March weather was expected to be well below normal temperatures? Contrarian thinking does not work well with commodities.
    18 Mar 2013, 07:15 PM Reply Like
  • eagle1003
    , contributor
    Comments (1628) | Send Message
     
    Buy on weakness and don't get suckered into going short. NG is going to surprise a lot of players. I expect a quick downward move and then up well past $4. If we get a stock market correction, it might be a good opportunity to pick up some NG producer stocks or the ETF (FCG) or for the more daring, the triple leveraged (GASL).
    18 Mar 2013, 07:05 PM Reply Like
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