Natural Gas Prices on the Rise!

It looks like natural prices are on the rise again.   Will the prices continue to rise now leading into cold weather months?

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Permalink Reply by jason irvine on September 29, 2014 at 3:09pm
With storage being low and the predictions of a bad winter I think the price is here to stay and slowly rise until dec. Jan. Then go up alot.

??? What on the farm r u seeing that is a indicator? I will say that the ground hogs are extremely large this year. Can they eat more then normal or was there just alot of food this year?
Permalink Reply by Summer Johnston on September 29, 2014 at 4:05pm

What on the farm r u seeing that is a indicator?

There's heavy ground cover in the form of weeds/brush. I know it rained alot this summer but it's hard to brush hog through it, it's so dense. Nut trees are heavy with nuts. Horses started to form a base winter coat--way early in late July/early August. Their coats continue to thicken. That's always been a pretty reliable sign for me. And their coats are pretty dark in color. Just my thoughts. 

Permalink Reply by jason irvine on September 29, 2014 at 4:27pm
I agree....I've been seeing like that. The animals seem to know.
Permalink Reply by jason irvine on September 29, 2014 at 4:27pm
I've been seeing things like that.
Permalink Reply by Tim Tarr on September 30, 2014 at 3:28am

http://www.nextstepliving.com/old-farmer-s-almanac-2014-winter-pred...

"How accurate is The Old Farmer’s Almanac?
Typically, season to season, region to region, we’re about 80 percent accurate. Obviously, some years are better than others and last winter we were on target with our temperature forecasts in 15 of our 16 regions."

http://www.ibtimes.com/farmers-almanac-winter-2014-forecast-draws-s...

“The Farmers’ Almanac forecast for last winter was less than stellar. It called for cold weather in the East and mild weather in the West,” Samenow wrote in the Washington Post. “The opposite occurred. The eastern two-thirds of the U.S. had a milder-than-normal winter, and it was cooler than average in parts of the West.”

Sooooo, Last winter was mild ?? Nuff said. I'll take Farmers Almanac prediction over the

pointy headed, man-made global warming crowd any day. I'll even take the ground hog over those arse clowns.

Caterpillar hair thickness is one I use. Seems pretty thick this year. LOL

http://www.space.com/23934-weak-solar-cycle-space-weather.html

Sun's Current Solar Activity Cycle Is Weakest in a Century.

http://science.nasa.gov/science-news/science-at-nasa/2006/10may_lon...

Hmmm..., I guess that might have a small effect too. Nah, that's just crazy.

It's all CO2. It's rising sooo fast that it's causing "goober" cooling now.

Permalink Reply by jason irvine on September 30, 2014 at 3:30am
Good stuff. Lol
Permalink Reply by Carl Krebsbach on September 30, 2014 at 8:16am

I have also heard that this winter is expected to be especially cold.

I also wonder how this news comes into play:

"Did The Winter War Just Begin? Russian Gas Supplies To Europe Plunge 15%, Ukraine Transit Slashed 54%

Just a week ago, the Russian energy minister made the first public 'threat' of gas supply "throttling" disruptions to Europe but judging by the data that has just been released, it appears the 'throttling' has begun. Bloomberg reports that Russian gas supplies to Europe fell 15% year-over-year in Q3 - the most in over two years - as natural gas transit through Ukraine plunged 54% year-over-year. In 2013, Gazprom sent 60% of its supply via Ukraine pipelines, in August that dropped to 39%, and in September only 34%. Of course, Europe remains confident its storage efforts will buffer any "Winter War" disruptions, as we noted here, but as Citi warned previously, "if colder weather arrives, storage levels will be drained," and then there is the Spring (and German industry needs)......" 

(more at link http://www.zerohedge.com/news/2014-09-30/did-winter-war-just-begin-...)

Permalink Reply by Jack Straw on September 30, 2014 at 9:43am

RE: "I also wonder how this news comes into play:

"Did The Winter War Just Begin? Russian Gas Supplies To Europe Plunge 15%, Ukraine Transit Slashed 54%"

What happens in Europe, stays in Europe .... as far as Natural Gas is concerned.

What happens in North America, stays in North America.... as far as Natural Gas is concerned.

Currently North American Natural Gas is not fungible; what is produced in North America (by necessity) stays in North America.

The present situation is one in which North American natural Gas is stranded  .... North American pricing will solely be determined by the dynamics of North American supply and demand ..... European pricing will be determined by European demand as supplied internally and through imports by pipeline and LNG from outside Europe (Europe has a certain capability to import LNG).

The situation regarding North American Natural Gas should and likely will change as the capacity to export Natural Gas from the U.S. and western Canada develops (so long as the U.S. Government goes along with the idea of exporting substantial quantities of Natural Gas). A lot will have to happen (and time will have to pass) before there is a realistic expectation that there will be any relationship between European and North American pricing of Natural Gas . Heck, right now there is no interrelated pricing relationship between Henry Hub and Leidy Hub.

All IMHO,

                 JS

Permalink Reply by David Rontal on October 1, 2014 at 2:19am

Gas prices will not go to $7.00 MCF anytime in the next five years.  You have to understand that the Utica and Marcellus get drilled because they are the cheapest gas assets to produce in this country.  Once you get to $5.00 MCF gas, additional supply from large basins (Fayetteville, Haynesville, Eagle Ford Dry Gas window) come on-line.  Even with 10BCF/d export, I have seen nothing to suggest that gas trades outside of the $3.50-$5.00 MCF band in the foreseeable future.  Further, the foregoing is Henry Hub pricing and until at least 2017, there is going to be a significant basis discount in the Utica/Marcellus.

Permalink Reply by Jack Straw on October 1, 2014 at 5:26am

RE: "There is relatively no volume to establish future's prices beyond 2015 on HH."

Point well taken.

Not only is the NYMEX Henry Hub price irrelevant to denizens of the Marcellus/Utica; but additionally the volumes of Natural Gas passing through the (once critical) Henry Hub are becoming an ever smaller percentage of the Natural Gas produced and consumed.

I cringe every time I see the NYMEX Henry Hub price quoted; it is at best irrelevant and at worst misleading!

What I would like to see quoted is an average of (perhaps eight) various regional hubs (the average price weighted by volume traded); this would be a meaningful National Average.

However, for we as individuals, it is the price at the Hub at which the gas produced from our property is traded that really matters.

All IMHO,

                     JS

Permalink Reply by wyalusing jim on October 1, 2014 at 9:41am

jack straw said, "However, for we as individuals, it is the price at the Hub at which the gas produced from our property is traded that really matters."

actually jack, the price that your lesse(s) sell your gas for is what matters.

no index is any more than an indicator of which way gas prices are trending for us mineral owners.

and certainly, those spot prices that you quoted earlier in this thread are misleading at best.

wj

Permalink Reply by farmgas on October 1, 2014 at 10:14am

WJ...Are you aware of any agreements between Consol CNX Gas and Dominion to determine the sell price into the Dominion DTI pipeline to Leidy?   I`m thinking Consol receives a higher Mcf price because of their 15 year contract with Dominion.  I`m just trying to understand the pricing structure for gas royalties......Thanks!

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