User 305589

Natural Gas Is Heading to 1997 Levels, Should Stay There Awhile

that should read CHK's chairman...
sorry for the typo


On Apr 28 05:41 AM User 305589 wrote:

> good article. However, the market has been looking at this for the
> past 6 months or so - the current depressed NG prices are depressed
> precisely because of these bearish factors. While oil has risen 50%
> off its lows, NG is making fresh lows, defying the long established
> crude-ng price relationship.
> The point is: there will be U:S. companies forced to produce a lot
> of NG even at $3 NG or below. But there are a lot who are not and
> who will not sell their Ng below 4$. They will simply produce as
> much as they need to keep their lights on and will wait for prices
> to improve rather than virtually give away their NG reserves. And
> rest assured, the administration in DC will not sit idle watching
> the destruction of the U.S. natgas industry which forms a center
> piece of their future energy policy. Expect nothing less than significant
> tariffs for LNG imports.
> I have no idea where Ng prices will be a year or two from now. But
> my bet (and my money) is with strong low-cost producers like mcf
> and chk. CVHL's chairman over the past years has been pretty good
> in judging the market and he has hedged the company accordingly..
> he has been cautious on NG, too and not ruled out price weekness
> to last well into 2010.
> Still, at 3-3.50$ a lot of production will simply go off the market,
> so i simply don't see it to fall much lower from here. it may rise
> back into the $4-$6 range gradually as the low prices attract additional
> demand and additional uses.

Natural Gas Is Heading to 1997 Levels, Should Stay There Awhile

good article. However, the market has been looking at this for the past 6 months or so - the current depressed NG prices are depressed precisely because of these bearish factors. While oil has risen 50% off its lows, NG is making fresh lows, defying the long established crude-ng price relationship.
The point is: there will be U:S. companies forced to produce a lot of NG even at $3 NG or below. But there are a lot who are not and who will not sell their Ng below 4$. They will simply produce as much as they need to keep their lights on and will wait for prices to improve rather than virtually give away their NG reserves. And rest assured, the administration in DC will not sit idle watching the destruction of the U.S. natgas industry which forms a center piece of their future energy policy. Expect nothing less than significant tariffs for LNG imports.
I have no idea where Ng prices will be a year or two from now. But my bet (and my money) is with strong low-cost producers like mcf and chk. CVHL's chairman over the past years has been pretty good in judging the market and he has hedged the company accordingly.. he has been cautious on NG, too and not ruled out price weekness to last well into 2010.
Still, at 3-3.50$ a lot of production will simply go off the market, so i simply don't see it to fall much lower from here. it may rise back into the $4-$6 range gradually as the low prices attract additional demand and additional uses.

Natural Gas Is Heading to 1997 Levels, Should Stay There Awhile

quite to the contrary. the glut of lng combined with depressed demand will put huge pressure on margins for lng terminals.
cheniere is a stock i wouldn't touch in this environment


On Apr 27 03:52 PM Amouna wrote:

> A good play for this would be long Cheniere Energy (seekingalpha.com/symbo...).
> Their stock will take off to the moon in a matter of months....