Surging Natural Gas Prices
How are the surging natural gas prices affecting drilling this year, and what about going into 2022? Are the gas companies taking advantage of these higher prices? What`s next?
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Replies to This Discussion
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Permalink Reply by farmgas on
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Sounds a little confusing after hearing & reading so much from the gas companies that we need more pipelines. This one is a big deal so what more is needed? Maybe it`s really about having more gathering or localize pipelines to get gas to the major pipelines. This seems more like what Ralph is describing for Tier 2 acres. A lot of variables for gas companies to work through.
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Permalink Reply by Ralph cramdon on
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The market currently has too much gas , hence the $2 price range .. States in New England and mid Atlantic have BANNED pipelines for many years .. NY has banned NEW gas hookups starting somewhere around 2026 ... Boston would rather buy overseas LNG gas than have a new pipe ... We live in Bizzaro World where common sense doesnt seem to prevail .. NYC has all the gas it needs just a few hundred miles away in the Scranton PA region yet is spending billions on windmills that only produce power 50% of the time ... Are gas producers investable ? Yes > when the pendulum swings the right direction .
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Propane inventory 30% above 5 year average ... Wet gas falling out of favor ....
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Permalink Reply by Dott on
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Ralph, Can you elaborate on "Wet Gas is falling out of favor"? Wet gas is used to make many products and is a different commodity than oil and dry gas. We still need it for plastics etc. Unless because the consumer is buying less is why they need less wet gas.
I am interested to know because there is a lot of wet gas in southeastern Tuscarawas County that drillers are currently after.
Thanks
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Dot, Wet gas as you say is really important in making thousands of products we all use every day . Demand can and does waiver as the economy ebbs and flows , but the underlying demand always remains .. Production runs thru boom and bust cycles .. Take Propane Inventories which are 30% above the 5 year average ,, a year or so ago it was roughly 20% BElow the 5 year average ..AR is currently getting roughly $30 a barrel for NGL , vs over $45 per barrel last year ,, with AR production in the 180,000 barrel per day range that $15 barrel difference is a big negative on share prices .
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Oil back to $68 .. Gas drifiting higher . Started a small position in a Appalachian gasser
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Permalink Reply by farmgas on
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We seem to be in a funk these days trying to learn who is doing what & where. NG price seems to be rising somewhat with predictions for a higher path during 2023. That sounds nice.
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Added to those small positions . I would now term them 'moderate ' positions
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Production continues to drop ... Is the train with the old farmer leaving the station ?
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Permalink Reply by farmgas on
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Is production being reduced across the US gas fields or is it more localized such as in the Permian area? Is production being reduced in the Appalachian Basin...in Pennsylvania? Which area has a greater impact on pricing?
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Haynesville is the most expensive and most likely to soften first .. Marcellus is basically pipeline constrained , Permian is essentially ' Free Gas , as they want the oil rather than the gas ... Private producers have a impact rarely made public .
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