If you're bullish on Oil... you should be bullish on Gas
Natural Gas could be set for big moves up
= = = = =

I like the chart, showing the ratio of Natgas-to-Crude



It looks like, we have seen a nice bounce of the lows, and a correction.
And the ratio may now be set for a thrust up.

Back when I ran the Energy Derivatives team at a big global bank, I used to write market
comments for our clients. They were popular, and clients that followed my suggestions regularly
made money. One of the things I noticed in those days, was the tendency of energy markets to
alternate between Good years, and Bad years. The last good year for Natgas was two years ago.
There's no guarantee we will see a big up year for Natgas in 2007/8 winter. But the market was
prepared and hedged for a jump last year, and they did not see it. They are less prepared this
year, so if we get a cold winter, the market may really fly.

A rally back to the "pinch point" at 0.12 or the Upper Bolly at 0.14 would not be a big surprise.
That may look like much, but it is big percentage-wise, and would really "light a fire" in the Natgas sector.

Here's a link to the Natgas chart : Natgas

I am looking for good trading ideas amongst the Natgas stocks. Any suggestions?

Threat:
"Storage for Natural Gas are at record levels of 3,425 BCF (early Nov.)

That's 9%, or 291 BCF, ahead of the 5 year average, and
nearly 100 BCF ahead of last year." - source: US Global report

(Question: how much has overall demand risen in 5 years, and even one year,
as a result of the big jump in Oil

So it seems the market IS rather well-prepared for a Cold winter,
(but maybe less so, psychologically)

Ed Young on TFNN spoke about how the natgas co's were al trying hard to sell
"price protection" to their clients. They are complacent because of the high storage.

So this factor needs watching.

= =

I will supply some links for collecting & montoring this information

PennWest is my perennial fav (PWT.UN - TSX)

Cons: Chart doesnt look great (to my eye), uncertainty over the trust tax situ in Alberta, recent takeover and digestion of another co. (Canetic)

Pros: Large cap, established producer, pays 14.5% div, run by dull conservative honest types, was touted back in summer by Zapata George(?) on Frizzers show


Also Unbridled (UNE.V) is another one Im watching, though missed the early Sept low (damn)

(a throwaway comment from Russ Winter):

"Among the commodities that have been exploding lately is natural gas which has popped out of a saucer base. Break that resistance overhead like so many goosed commodities have of late, and it’s blue sky ahead. And just in time for a new round of price increases for Joe Ultra Light Sixpack (JULS) this winter. Price increases are coming fast and furious now. In thinking about strategies to play this market, unless one can spot a commodity where speculators are not heavily long like natural gas, it seems to me that going long the general crack up boom is a very high risk proposition"

/see: http://wallstreetexaminer.com/blogs/winter/?p=1199

Independent Natural Gas and Oil - Large Cap
CNOOC Limited (34%)CEOH188.80149 28,180 108.00- 1.75
ncana CorporationECAB71.73 756 54,200 72.00 0.19 1.00
Canadian Natural ResourcesCNQ81.28 539 43,800 87.00 0.23 0.95
Occidental Petroleum Corp.OXYB70.74 837 59,200 77.00 0.07 0.92
XTO Energy Inc.XTOB66.46 391 25,970 75.00 0.17 0.91
EOG ResourcesEOGB87.00 247 21,500 102.000.06 0.86
Anadarko Petroleum Corp.APCB57.83 467 27,000 74.00 0.35 0.86
Devon Energy CorporationDVNB92.41 450 41,600 129.000.14 0.76
Total or Median301,000 0.16 0.92

Independent Natural Gas and Oil - Small Cap
Berry Petroleum CompanyBRYB46.25 45 2,080 44.00 0.23 1.04
Encore Acquisition CompanyEACB35.76 54 1,940 54.00 0.32 0.77
Energy Partners Ltd.EPLB14.85 35 510 38.00 0.31 0.58
Cimarex Energy CompanyXECB39.90 85 3,380 76.00 0.09 0.57
Total or Median7,900 0.27 0.67

Income
Kinder Morgan Energy Partners, L.P.KMPS51.95 178 9,260 17.00 0.54 1.94
Kinder Morgan Management, LLCKMRS50.28 63 3,170 17.00 0.54 1.90
Pengrowth Energy TrustPGH18.97 246 4,670 17.00 0.29 1.08
Canadian Oil Sands TrustCOSWFB39.00 479 18,680 39.00 0.07 1.00
Penn West Energy TrustPWEB31.59 242 7,630 34.00 0.22 0.94
Enerplus Resources FundERF48.65 128 6,230 52.00 0.13 0.94
San Juan Basin Royalty TrustSJTB37.73 47 1,760 40.00 - 0.94
Hugoton Royalty TrustHGTB25.06 40 1,000 34.00 - 0.74
Total or Median52,400 0.18 0.97 B =

/more: http://www.mcdep.com/mr71106.pdf and: http://www.mcdep.com

Check out the COT. Says it all.

Time to resurrect this thread?

Bill Powers (great name for an energy guy) said on financial sense on the weekend that he thinks Nat Gas could be "the big story for the rest of this year".

Plus a breakout seems to be happening a la Mark Shipman

3/16/08

Yes, it would be great to get some discussion on Nat Gas. The fact is, some big insiders are buying BIG stakes in their own companies. I think most of us have seen what Chesapeak's CEO has done! The "smart money" I've talked to are such cheerleaders fro Nat Gas. They act like it's going to $50 / mmbtu (up from today's $9.90 or so).

Here's what's on my mind:

1) Agricultural angle- Jim Rogers is all over agriculture, and has been for some time. He believes, whole heartedly, that we're only at the beginning of a 20 year commodity bull. He feels like ag. is going to be in shortage for a long time to come. If this is the case, fertilizer prices (nitrogen, phosphate and potash) are not bubbles. Now, nitrogen is the main cost input in fertilizer, especially nitrogen. If this is all correct, what a tailwind for nat gas.
2) Power generation angle- coal is abundant (250 billion tons remaining in the US; and, we consume about 900 billion tons annually right now....that's 250 year
remaining at present consumption). Most coal goes to fire power plants. Knowing that nuclear plants won't/can't come on line for many, many, many years, and that solar and wind combinded won't hardly make a dent, even in 10 more years, this seems a good bet that fossil fuels will still be converted to
electricity in the coming years. The question is, how much of this will be natural gas? If the price of nat gas goes up, does this tend to self-limit the demand for itself??
3) Macro Economic Angle- If the US goes into a deeper than expected recession, the decreased demand for heat may have an effect on nat gas demand.
Could this be a headwind to price increases?

Those are the issues running through my mind. What do you think? Is Natural Gas in a bull market for 2008 and beyond? Or, do the fundamentals dictate the same old trading range?

Max

I'm interested in gas. I've heard gas tipped on 2 or 3 occasions for the reasons Max outlines here in the last 3 months.

Moneyweek thinks gas looks good too. P11 from last weeks issue (14/3/08) makes the case. They don't seem to have a html link up yet to that article but if you are a subscriber then you've probably already seen it, if not take a look. I'll try to post a link when they put one up.

They make a strong case for increasing demand related to America's forecast energy growth, with particular reference to NG's green credentials compared with coal and the financing risks now being associated with coal power stations by the likes of JPMorgan and Morgan Stanley (ie. from increasing taxation burden related to carbon emmissions).

In terms of targeting future prices they quote Chris Mayer from Rude Awakeing who says "Old salts of the energy markets steer by the lights of a 6 to 1 ratio oil/gas"

This would seem to indicate a potential $17.5 MBTU (the 6 to 1 ratio being 0.16 on Dr Bubbs inverse ratio from the first post)

Perhaps you could give us an update Dr Bubb based on your experience as an "old Salt"

Obviously, I meant to say we (US) consume 900 million tons annually and sport roughly 250 billion tons or recoverable coal.

With an 11% decline THIS WEEK, I see the silliness of betting against T. Boone Pickens! The guy's only lived this stuff for the past 60 years!

The long-term fundamentals look somewhat promising. T. Boone would (I think) agree. In the near term, the rout is still on!

TBoone Pickens on gas prospects


Boone Pickens’ Energy Forecast: Natural Gas is the Transportation Fuel
for Tomorrow
Natural Gas Services Provider NeoFirma Assists in the Asset Management
of this Premium Fossil Fuel

DALLAS--(BUSINESS WIRE)--Legendary oilman T. Boone Pickens weighed in
on the United States’ energy situation during a recent webcast hosted
in part by NeoFirma, the leader in well information management
services for the energy industry. Mr. Pickens also offered insight
into what the future of transportation fuel can and should be.


“The United States’ oil production peaked at 10 million barrels a day
during the 1970s,” says Pickens. “Today we’re producing half of that
with absolutely no hope of increasing production. Even if we opened up
the entire country and looked for it, it’s just not there.”


That statistic, coupled with the nearly six billion dollars being
spent each year to import oil, led Mr. Pickens to provide a grim
assessment of today’s economic situation. “This is the greatest
transfer of wealth from one area to another in the history of mankind,
and this country just can’t stand it. But there are ways to make a
dent in our dependence on foreign oil.”


He cites using our own country’s abundance of natural resources –
natural gas in particular – to reduce the import of foreign oil by as
much as 30 percent. Specifically, using natural gas as a
transportation fuel will not only decrease the country’s foreign
dependencies, but will also make great strides towards cleaning up the
environment.


“Natural gas is a cleaner fuel source and North America has an
abundance of supply to tap into,” says Pickens. “Just look at what’s
occurring with shale development throughout the country. It’s real and
it’s happening everywhere – from Northeast British Columbia to the
Barnett Shale in Texas; from the Appalachian Basin to the Fayetteville
Shale in Alabama. In today’s business and economic environment,
natural gas is much more exciting and promising than oil. It is the
premium fossil fuel.”


Mr. Pickens made these comments during his webcast interview with the
Southern Gas Association on March 28, 2008. To view the program in its
entirety, visit http://events.variview.net/clients/ctn/20080328. The
interview was co-sponsored by NeoFirma.


From prospecting and exploration through operations, NeoFirma provides
natural gas producers and service providers the ability to create
improved value through its web-based information services. NeoFirma’s
services create performance reports and graphs to manage every point
of the well’s life cycle – assisting clients in the business decision
process with the right information, at the right time, and at the
right place

Any ideas what's happening with NATGAS prices at the moment? Is this pullback to $12 a buying opportunity or a sign of a heavier correction to come???

Guess it really depends on your time frame. From what I'm hearing and reading it may be an opportunity to buy (and continue buying all the way down this correction) if you have a 18 month to 2+ year outlook, if $200+ Oil is to be believed then wouldn't NatGas follow suit?

Shorter term, who knows?

What are you reading GI?

http://tonto.eia.doe.gov/ftproot/features/reloilgaspri.pdf


http://www.rice.edu/energy/publications/do...nship-nov07.pdf

NATGAS now at $9.90.

Ratio high oil/natgas is 14 over the long term, which with Oil falling to a possible $110 should put a floor under the gas price of c.$7.85. IMO at that price gas would be a steal, but as GI says, you might have to wait 2 years before you see a significant return.

To be honesst, at $9.90 on a current ratio (v oil at $126) of 12.7 and a forward ratio (v oil at $110) of 11.1 I think it is a steal now, but with the added requirement to possibly margin $30k for the privilege.

Looking at these at the moment, are you exposed to the gas Gatsey?

ngsp.l
ngaf.l
ngas.l

I have some ETFS Energy which incorporates gas but a direct Future is making my mouth water at the moment, but at 10,000 mbtu per contract thats £5k loss/profit for every $ move in NG... just about finding the right entry (which i think is about now....)

Rush for Natural Gas Enriches Corner of the South



Am i reading this right, they have possibly discovered 10 years (at current consumption) supply?
Could this be why the price has plummeted?

I think Shale is relatively well known about, certainly Pickens keeps going on about it. I think in the final analysis there is lots of many commodities about over the longer term. People talk much of a mega cycle in commodities this time around yet I am more a believer in a 'normal' 14 year cycle or so. So we are 7 to 8 years in with 6 to 7 years left. During this time it still takes many years to mobilise infrastructure, knowledge and people in order to extract commodities as prices rise.

IMO the recent fall is a pullback on overbought signals.

I think by looking at the charts there a seasonal element involved too. I was just confused how severe this correction has been, but then looking at the corrections in 06 and 07 maybe its not too bad.

how do you think the proposed prices increases (uk) will effect the price?

Do you know of any good sites for further research, i'm looking for inventory and proven resources.

Gas still arouses me

Agreed


I think it;s the other way round, I think Centrica and co can see the writing on the wall and are therefore warning of consumer prices doubling over two years, driven by rising wholesale prices. Or did you mean something else?



I need to do some more digging on that one.

Well the two of us digging should uncover something

Just testing how the formatting turns out


**edit-to delete crap formatting

Weekly Natural Gas Storage Report

Interesting chart

Indeed. It would appear that the chart reflects underground natgas storage across the whole of the US:

"This report tracks U.S. natural gas inventories held in underground storage facilities. The weekly stocks generally are the volumes of working gas as of the report date. Changes in reported stock levels reflect all events affecting working gas in storage, including injections, withdrawals, and reclassifications between base and working gas"

It is very interesting to note that stocks are 12.7% down on this time last year, including a massive 17.3% down on last year in the producing states (which presumably store up ahead of onward distribution to the consuming states). Also, stocks are only marginally down against the five year average which is in stark contrast to stocks being well above average this time last year (just ahead of an upward surge in prices by 151% over 11 months between end Aug07 and 1 July 08)

Obviously these stats could be interpreted a number of ways and I note there are longer term figures going back to 1994 on here which may give some further insight. Suffice to say with the longer term oil/gas ratio appearing to be so out of wack and some apparently very bullish low stocks figures (compared with last year) a cold winter this year could send prices sharply upwards again.

edit: Having said al that, the price of NG seems to be sooo volatile though, even a silver lover like me comes out in a cold sweat when confronted with a decision to invest in NG !

Not only that, a warmer summer has the same effect on demand because of all the a/c and electricity use.

Moreover, i am hearing reports that there is a 1 in 3 chance of a Cat 3 hurricane in the G.O.M. this year. I dont know how significant those odds are though

Will post some more interesting charts that i picked up.

I think you are on to something with silver though, it creates a tolerence to risk perhaps way above what we would normally asscociate with a good investment.

GW i think you are also on to something in terms of the new discoveries in US.

http://online.wsj.com/article/SB1217463587...=googlenews_wsj

I'm not convinced though that congress will be able to manage regulation through effectively in order to take full advantage of new finds in time to prevent further price rises.

ps. See post below which I posted inthe "Frizzer" thread yeterday.

Interesting money morning email from Frizzer this morning on bull and bear market charts and golden crosses on moving averages (I won't copy in here in the interests of not being sued by Bill Bonner). He goes so far as to say you can use it in markets you know nothing about...

All good stuff, but I am equally galled at the synopsis of juniors being in a bear market and wondered what instances we might find of particular markets giving 'false' signals or perhaps that these signals may indicate bull and bear 'phases' (which may be short lived). Here's one, but admittedly from a market which appears to have quite a split personality:




Under the model we are discussing a golden cross (or as I prefer a "dead cross" on the downtrend) of the 34 WMA crossing the 52 WMA to the downside with the actual spot price below that, seemed to form indicating a bear market trend for Natural Gas prices at the end of May 2006. True to the model we got a bounce to nearly the 52 WMA in early August 2006 with the price reaching about $8.70 per mbtu. Following this a big 52% fall was seen with prices hitting $4.10 on 25th Sept 2006. Around the middle of Feb 07 though a new godlen cross was formed indicating a new trend to the upside with prices eventually hitting $13.70 around 7/7/08. Interestingly, today the price has corrected to the 52 WMA.

So in this instance a recorded bear market (or at least a bear 'phase') lasted about 9 months. I hope the Juniors market can show the same resolve !

ps. Who would use this model now then to predict natural gas prices will bounce off the 52 WMA, as the model indicated we are in a bull market, even if you don't know anything about the market ?

Agree and i'm banking on it. It'll be a while before they take their finger out





Besides the storage factor on the price i thought these spikes were interesting. I can only think that the spike in 2003 was a result of the Iraq invasion and in 2005 Katrina and rita hit.



Bit of an updated chart and some further insight



This is my favourite chart, its a bit outdated so i'll be on the hunt for something more recent.

http://www.usatoday.com/money/industries/e...tural-gas_N.htm

These sound like the words of someone trying to dismiss a shortage, whats going on there?
I'd like to see the calculation to see how they got 118 years. Bacteria in a bottle springs to mind.



I suspect Natural gas companies are really trying to convince the public to look favourably at it as an alternative to oil and it seems to be getting lots of exposure thanks to mr pickens.



I was going to call him an idiot for missing the point of obtaining power from wind, but then i see he has an obvious VI
Aubrey_McClendon

Natural Gas trading at $4.67. To me this looks very cheap. Is anyone buying at the moment?

ETF NGSP looks interesting at these levels although i'm not sure if it has the same pitfalls as the Oil ETF's.
http://www.etfsecurities.com/cslgb/etfs_natural_gas_gb.asp

Not according to a recent FT report

+ Also a brand new LNG storage facility opened in Wales can handle/store 20% of UK Gas requirements !

http://www.ft.com/cms/s/28e2e490-48c5-11de...144feabdc0.html

US LNG imports put pressure on struggling domestic producers
By Sheila McNulty in Houston

Published: May 26 2009 05:25 | Last updated: May 26 2009 05:25

US imports of liquefied natural gas have almost doubled since the start of the year, putting pressure on a domestic market already hit by weak demand and falling prices .

Yet the string of massive global production projects feeding this rise in imports have only just begun to come online, so the flood is expected to grow.

The poor state of the global economy has left the natural gas with no place else to go. “The US can act as a sink,” says Jon Wolff, analyst at Credit Suisse Equity Research.

The US has abundant storage facilities, but the amount piling into that storage already is higher than its five-year average, so it may well all be full by the autumn.

This sets the stage for acute pressure on already low domestic natural gas prices, which have fallen from just over $13 per million British thermal units in July 2008 to less than $4 today.

“There’s too much gas in the market,” says Nikos Tsafos, analyst in PFC Energy’s upstream and gas group.

Many domestic companies have stopped drilling, pushing the rigs in use down more than 50 per cent in recent months and setting some producers on the edge of bankruptcy.

Because most US drilling is done by small companies, with fewer than 20 employees, many have little or no cashflow and no available credit to continue drilling.

Moody’s Investors Service issued a report in May listing the 13 exploration and production companies it covers that have weak borrowing base support.

This is crucial to operations, as banks use annual reviews of company debt to cut permittable levels below existing borrowings.

Among them were Brigham Exploration, which is nearly fully drawn; Delta Petroleum, which has had to reduce its bank debt; Energy Partners, which has had its borrowing base reduced; and Dune Energy, which is selling assets.

Chesapeake Energy, one of the biggest gas producers in the US, has said that it is plugging some production.

If others follow that lead, it would help ease the oversupply in the market and would support natural gas prices.

But LNG flooding in to take its place will continue to worsen the oversupply picture, putting further downward pressure on domestic natural gas prices.

“US production has to come down to stabilise prices,” Mr Tsafos says. “[But] LNG imports are going to complicate that.”

Michael Newport, chief executive of Mainland Resources, a small oil and gas exploration and production company, says the industry hopes US natural gas prices will recover to $7 or $8 per million BTU next year, though some are predicting a fall to $2.

Regardless, he will continue drilling to capitalise on the uptick in the US economy, when it comes.

With thousands of small natural gas producers across the US, the country is almost completely independent in natural gas, with about 85 per cent of the natural gas used in the US produced in the country.

Many find it disturbing that foreign producers of LNG are gaining a foothold in the US.

When Gazprom, the state-run Russian natural gas company, said this month that it would import 20m tons of Russian LNG into the US, the Independent Petroleum Association of Mountain States objected.

“The US is awash with domestically produced natural gas,” says John Harpole, president of Mercator Energy and a member of the association’s board.

“Flooding a market with a foreign product when prices are already low has proven disastrous in the past,” he adds.

But the trend is poised to continue. With huge LNG projects in Russia, Yemen, Indonesia and above all in Qatar expected to start up this year, there is a flood of LNG coming on to the market.

Murray Douglas, an analyst at Wood Mackenzie, the consultancy, says that developers may not be bringing projects online with the same urgency as they would have, had prices been at last year’s highs.

However, they are still moving forward, as any delays will adversely impact the economics of their projects. So the flood of LNG to the US will continue.

Mr Tsafos forecasts that US imports of LNG will more than double by the year-end, while some are predicting as much as a five-fold increase.

Not good news for the couple of small caps on AIM planning to use empty oil fields as gas storage facilities. I wasnt aware of this until the other day

An FT report brought it to my attn - was very negative on near term prospects for LNG prices

http://www.euractiv.com/en/energy/europe-l.../article-182253

Europe's largest LNG terminal opens in UK
Published: Wednesday 13 May 2009
Europe's largest terminal for receiving giant tankers of liquefied natural gas officially opened on 12 May in Wales, against a backdrop of ample supplies and weak demand.

Background:
Liquefied natural gas (LNG) is one of the world's fastest growing sources of energy. Global LNG demand is expected to reach approximately 470 million tons per annum (MTA) by 2030, an increase of over 200 percent since 2005.

The South Hook terminal at Milford Haven, Pembrokeshire in Wales represents a technological milestone and will make additional supplies of cleaner-burning natural gas available to the UK and the rest of Europe.

South Hook LNG Terminal Company Ltd. is owned by Qatar Petroleum (67.5%), ExxonMobil (24.15%) and Total (8.35%). It is part of the larger 'Qatargas 2' joint venture, which supplies gas to the UK from the North Field off the coast of Qatar, and is brought ashore to be processed and liquefied at Ras Laffan Industrial City in Qatar. It is then loaded onto a fleet of world-class Q-Max and Q-Flex LNG ships and transported to the UK.

The terminal adds to the UK's LNG import capacity and energy diversity, and will have the ability to deliver up to two billion cubic feet of gas daily into the natural gas grid when it reaches full operational capacity, at the end of 2009. The terminal, which is being completed in two phases, includes five LNG storage tanks, a regasification plant, ship unloading systems and a jetty to allow the berthing of the world's largest LNG vessels.

As Robert S. Franklin, vice-president of production at ExxonMobil recently said in Brusssels (EurActiv 27/03/09), the company plans to open one more major LNG terminal, 16km offshore in Northern Italy. When it reaches its full capacity of 80bn cubic metres per year, it will provide 10% of Italy's total gas needs, Franklin said.

More on this topic:
LinksDossier: Energy Green Paper: What energy policy for Europe?
News: Liquid Natural Gas in 'construction boom'
Other related news:
Europe urged to be 'visionary' with Ukraine
Turkey to help push Nabucco ahead of rival pipeline
Oil prices take centre stage at G8 meeting
Russia alarmed by Ukraine's 'empty' gas stocks
Russia adds final pieces to 'South Stream' puzzle
The terminal - a joint venture between US major Exxon Mobil, state-run Qatar Petroleum and French energy group Total - can pump gas into the national grid at a rate of about 11 billion cubic metres (bcm) a year.

It will be able to supply 21 bcm a year of gas once the second phase of the project is complete and the last of its five storage tanks enter service by the end of 2009, its project manager said.

"The commissioning of the plant is done," Daniel Wieczynski told journalists at the inauguration on Tuesday of the terminal in south Wales, which was was attended by the Emir of Qatar and Britain's Queen Elizabeth II.

Two of the storage tanks, each the size of London's Albert Hall concert venue, are already operational. The third is expected to come into service in June, the fourth in October and the fifth before the end of the year, Wieczynski added.

Liquefied Natural Gas (LNG) was embraced as a fuel for the future because in contrast to pipeline gas, it can be shipped anywhere in the world.

But the infrastructure required is very expensive and demand has fallen significantly because of global economic slowdown.

The chief executive of Qatargas predicted consumption of the fuel should begin to recover from early next year.

"Yes, demand has gone down and we see more production coming, this will put pressure on prices. But we planned those projects on lower prices than we see in the market now," Faisal Mohammed Al-Suwaidi told reporters.

Britain's annual gas demand stands at about 100 billion cubic metres, according to figures provided by British gas and electricity supplier Centrica.

Following the decline of the nation's oil and gas production in the North Sea, about half of its needs are expected to come from imports this year. By 2017, LNG is expected to account for nearly 30 percent of Britain's total supply.

This was also good in FT, selected bits follow, More bullish on gas specific to the Gulf area

- Sounds like pipelines are needed in area to carry the gas

http://www.ft.com/cms/s/2d4dffc4-48c5-11de...144feabdc0.html
Middle East: Oil-rich region faces gas shortfall
By Andrew England

Published: May 26 2009 05:25 | Last updated: May 26 2009 05:25

It may seem a strange idea in the region of the world that is richest in hydrocarbons, but it is one that has been raising increasing concerns: the possibility of a critical gas shortage in Middle East.

By some estimates, the cumulative supply shortfall for the six countries of the Gulf Cooperation Council up to 2015 will be at least 7,000bn cubic feet. Of the GCC members – Saudi Arabia, Qatar, Kuwait, Oman and Bahrain – only Qatar, which has the world’s third largest proven gas reserves and the largest natural gas field, can avoid the problem.
The Abu Dhabi National Oil Company (Adnoc) is also looking at developing new gas fields and building a pipeline to enable the emirate to utilise its offshore gas.

Still, the fact that such a pipeline needs to be built “demonstrates that there was not an appreciation for the way that gas demand would grow, so I think the country has been caught a little off-guard by that”, acknowledges an official.

Perhaps supply is dampening recovery but read this:

http://www.financialsense.com/fsu/editoria.../2009/0602.html

The uptrend has now been formed by confirmation of a higher low.

I think we are at the earley stages of a bull market which will last about a year.

However, I would like to see the next high beat mid May's for confirmation, and indeed then the following low to be higher again than the low at the end of May.

But then again I hold NGAS so am looking for signs...

What do people think about the TA?

A Super Cheap Commodity
By Chris Mayer

06/16/09 Gaithersburg, Maryland Natural gas is more than a place to hide. It is, simply put, super cheap. As most other commodities — including oil — have rallied, natural gas remains stuck in a bog. In fact, the ratio of the price of crude oil to the price of natural gas topped 18-to-1 recently, which we have not seen since 1990, according to Barron’s.

The price of natural gas fell because there was too much of it. We are in a recession, after all. Industrial demand for natural gas has fallen through the floor and into the basement. But mindless zombies or congressional leaders (I repeat myself…) do not run this industry.

Producers are cutting back. And the decline rates on those gushing shale gas plays (which helped contribute so much gas to the pool) are 60-75%. Meaning that if these producers don’t drill, the flow of gas from their wells will fall by that much in the first year. And they aren’t drilling — not as much. The rig count has collapsed. It has fallen much faster than in the 1981/82 collapse, the worst since the Great Depression and one that still makes old natural gas men cringe to this day.

Another point: The marginal cost to produce natural gas for the vast majority of the industry is probably somewhere around $6-8. This next chart gives you a good snapshot of what the U.S. gas situation looks like.


Right now, the spot price of natural gas is under $4 and sits right on the industry’s cash costs and well below marginal costs. In short, natural gas supply is going to start to dry up here really soon. Grab your natgas ideas before the rush.

With NG the problem is that unlike oil there is not so much of an international pipeline network

However I remember Zappata George saying there was - or that one was coming

Wonder if we can figure that out - if gas gets as portable as oil then that could open up a whole new future

Best I found so far is this - but is 2003 yr
http://www.planete-energies.com/content/oi...tation-gas.html