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TFC Commodity Trading Forum

Re: 'Analyst fired up about natural gas'/Hal

Hi Hal,

Well, I am glad to see that someone has some "positive thoughts" !!

I think I have "bored the crap out of some folks" trying to get some participation on this market.

BUTTTTT as Trades would type, I don't think that I would run off with any "long positions" just yet.

I'm not sure what, if anything is being "peddled" in that article, I'd have to read it again.

But, production is still "way up" and some are looking for a 71 Bcf build this week as Temps. decline and the Ng power burn for Electric generation falls off going forward as A/C usage declines. It won't take long at 70 odd Bcf /week into storage to fix that "inventory problem mentioned" as we go into winter.

As for the Hurricanes mentioned, Gulf production is "much less significant" in the overall scheme of things compared to a couple of years ago.

The regulatory issue on "fracking" will likely take a couple of years to have much if any impact on production.

Then there is the ongoing interest in exporting LNG, and that does seem to be moving forward, but again that is a couple of years off. Producers can get much more for the LNG exports than they can get on the domestic market, but the building of the facilities to achieve that will take at least a couple of years.

And, yes, there has been a major shift toward Ng for Electric power generation, especially with the newer "combined cycle" plants that are "highly efficient", but if Ng goes up much at all in price there are still a "ton" of coal fired plants that are right now "marginal on fuel cost" that certainly will be utilized if Ng price goes up.

The environmental stuff is clearly working toward "shutting them down" but it is not going to happen in just a few years !!! Maybe not in what is left of our "life times" !!!!

Nuclear may be on the "way out" for the "long haul" but most of the 104 operating plants have a long way to go yet !!!!

Something you may want to look into is the "Contango" on the forward contracts. I have read that "storage facilities" may be becoming reluctant to take Ng into storage because they can't make any money for storing it ??? It has been on my list to delve into this issue, but have not as yet. But it is clear, a large part of "current consumption needs" do not involve the storage facilities. The Ng is delivered right off the pipeline, completely bypassing storage facilities.

Just my thoughts,