The price of natural gas is increasing....is 4.00 dollars in sight?

I'm ready for an increase in the price of natural gas. It's slowly inching upward. I hope the trend continues.

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Permalink Reply by Adam Martin on May 5, 2015 at 3:49am
It's not even at $3 bucks and we are going into storage months vs high usage / winter months. Based on that, I don't see it going anywhere near 4 bucks again for the next 5 or 6 months. Remember, that higher price you see is for Henry Hub and it doesn't reflect the local markets of Dom North and Dom South which are usually 25% to 35% lower than Henry Hub. If you are getting or will be getting a royalty check, pray for the pipeline projects in the Marcellus and Utica area's to progress quickly along so they can pump gas out to markets that need it and can sell it for that higher price... but for now, I see low prices ahead for anyone benefiting from Marcellus or Utica. It make take a few more years before that price starts to trend higher. More nat gas power plants coming online along with the Dominion Cove Point project finishing up will help but the market is saturated with cheap gas and the only way to fix that is to use it or sell it to someone who will...
Permalink Reply by Frank Walker on May 5, 2015 at 5:44am

Zack

While delirious, you're obviously feelin' pretty good.  I want some of whatever it is you're smokin'!

Seriously, it's May.  We are almost six months distant from real heating demand.  If we see $4.00 gas in the next year it'll be a miracle! 

Permalink Reply by Zack Jameson on May 5, 2015 at 5:59am

Frank, I'm just doing some wishful thinking (and praying)!

Permalink Reply by Joseph-Ohio on May 5, 2015 at 4:19pm
Foreign Markets may give it the boost we're looking for.

Sell it top $ to Foreign Markets while keeping the price low here at home !

Sounds a lot like the old snowball in hell axiom.

Good luck to all of us here in the USA.
Permalink Reply by Elnathan Cory on May 5, 2015 at 2:42pm

More pipelines to the area, more conversions to natural gas such as power plants and trucks, ISIS attacks Saudi Arabia and Israel bombs the Iranian "uranium processing plant"! That's all we need. I ask for very little.

Permalink Reply by Tim Tarr on May 5, 2015 at 5:33pm

Elnathan,
Be careful what you ask for! While those things might cause a short term spike the world Economy would tank. Than China would send troops into Middle East and Obama would go Golfing.

Permalink Reply by Bob Shaw on May 6, 2015 at 7:19am

Natural Gas, not so much, but I did notice that WTI Crude crossed $60 today. it has been a long time since that happened.

Permalink Reply by mlb on May 10, 2015 at 11:01am

Iv'e had mostly low numbers.  1.81 mcf with highest at 2.75 mcf last fall.  The low ball numbers came in the extreme cold of jan and feb so I wish they would go up but I think we are a couple years out from anything close to 4 consistently.

Permalink Reply by mlb on May 13, 2015 at 12:55am

See link below and you will find a blue graph with Dom south prices.  It clearly shows low prices in jan/feb...and unfortunately march and on out.  So I like everyone want higher prices but they are low.  I am now expecting about 1.50mcf for march/april.

http://www.naturalgasintel.com/data/data_products/daily?region_id=n...

Permalink Reply by Kyle Nuttall on May 15, 2015 at 4:50am

When oil prices get to about $70/bbl (maybe $3.25 MCF?), companies are going to start bringing rigs back.  That will kill the climb in prices real quick.  Also, I think that about $65/bbl the companies are going to start opening the spigots on wells that have been completed but are shut-in due to low prices.  That's even less expensive for them and really easy to do.  We're not going to see $4/MCF again anytime soon.  Definitely not before the beginning of next year.  Beyond that, I'm not going to try my hand at prophecy.

Permalink Reply by Alan Bowers on May 18, 2015 at 2:36pm

It is possible to earn considerably more than $4.00/Mcf even when the going rate is only $4.00/Mcf.

There are 124 cubic feet of natural gas for every 1 GGE (gallon of gasoline equivalent).  You get just over 8 GGE per 1 Mcf.  1GGE is selling for $2.199/GGE.  At $2.199/GGE you can gross $17.73/Mcf.

When you take the time to show someone how much money they can save by operating their motor vehicle on Compressed Natural Gas vs Gasoline and how quickly you achieve a return on your investment for converting a vehicle you will make the sale.

A vehicle that can operate on both gasoline or compressed natural gas gives you the flexibility of both worlds.

For less than half the cost that an O&G company spends on drilling a well they can add compressed natural gas to a station that also sells gasoline and implement a marketing plan that will show the people that live and work around where they just added CNG station why it makes economic sense for them to convert a vehicle or purchase one that can use both gasoline and CNG.

Yet, trying to convince shareholders of the O&G companies feels like an uphill battle.  It is as if they don't seem to care how much additional money they could make.  Even when the O&G companies would make the additional profits from selling the natural gas by GGE the general public would still be saving money over what they would have paid if they were still buying gasoline or diesel fuel.

As an example, 4th quarter production for Chesapeake wells IN OHIO ONLY, CHK had 419 of 437 wells reporting they produced natural gas.  If CHK had sold their production from just those wells by the GGE instead of the Mcf, that is production for just 92 days, they would have earned over an additional $1 Billion Dollars.

How much larger would the royalty checks have been if they were that kind of additional money?

Permalink Reply by Kyle Nuttall on May 22, 2015 at 12:33pm

Trying to convince an Antero Resources to do something like that would be difficult. They're still too small to diversify into such a different field.  I mean, they don't even transport their gas, they use other peoples' pipes to do that.  You'd have to get an Exxon or BP to do something like that.

I like the way you think, though.  Here in WV I'd like to see more CNG vehicles.  We have the gas here, why not put it to use here?

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