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NG futures trade at slightly less than $7, why?
Nov 07 17:51 pm
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All Comments by NOWHEREMAN »Natural Gas Prices Fall 80% to a 6 1/2 Year Low [View article]
No matter how weak the economy gets, the decrease in demand will not decrease the costs of distribution. At some point, future production will require higher prices.
Devon Energy's CEO was on CNBC a few weeks ago stating that low NG prices are causing him to reduce capex to such an extent that 2009's previously expected output would decrease 33%.
Pipelines from Canada deliver NG 24/7 to the US. Without that input there would not be a surplus in storage. Off hand, the US was importing something like 15% of its NG needs before the Anemic economy began.
When I read that Canada is stopping transmission into the US because we have an NG glut, then I will have to change my mind. Otherwise, IMHO, I have to diagree.