Natural Gas is Nearing the Magical $4.00 Mark!

What is driving it up?

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Permalink Reply by Trapper on November 30, 2013 at 6:49pm
It seems to rise as oil falls.......?
Permalink Reply by Charles Randolph on December 1, 2013 at 12:27am

Check the historic seasonal commodity price trend over the past 20 years as winter approaches in North America.

Permalink Reply by Joseph-Ohio on December 1, 2013 at 1:11am

IMHO - in my perceived order of precedence - probably because :

1) More consumption with onset of colder outdoor temperatures as Winter rolls in.
1) More customers use Natural Gas than Fuel Oil to heat with.
1) Customers are ' Captives'.
1) Suppliers want more money.
1) More exporting demand assists in driving the price upwards.
1) Why not ?
2) Any other rationale Suppliers can think of.
Must add that it's probably the best thing that can happen insofar as spurring more Exploration & Production / Drilling new wells into the hydrocarbon bearing sources (of course including the Shales).

Permalink Reply by bo boboski on December 1, 2013 at 7:39am

They say they're getting $3.95.  but what are they REALLY selling it for? The price they don't want the landowners to know about!  I'm sure,overseas they pay much,much more.

Permalink Reply by Trapper on December 1, 2013 at 10:14am
How much of our gas is being liquefied and exported for big bucks? Is this reflected in royalty payments....?
Permalink Reply by Jim Litwinowicz on December 1, 2013 at 10:33am

$3.95 is the price at the Henry Hub, a selling point Louisiana. That does not mean that is what the producers get. In fact in much of Pa nat gas is, or at least was a couple months ago, below $2.  I don't know what it is now but that is why a lot off companies have scaled back drilling in Pa. The lack of pipelines and the over production is causing the price discount.

There is very little nat gas liquified and sold over seas. I think some is still imported like in Boston area because of a lack of pipelines to the area. A few export terminals have been approved but it will be several years before they are online.

Even when they are online, the landowner will get the price the producers get when they sell it to the midstreams, not what it sells for overseas  A farmer doesn't get the price of beef in the supermarket, they get the price on hoof. If a lot gets exported the price will go up but that won't be for several year when more terminals are online.

Permalink Reply by Charles Randolph on December 1, 2013 at 11:28am

I find it more than misleading to state as fact that "MUCH of PA natural gas is...below $2." I believe it is unwise for an occasional lower price at Leidy or elsewhere (characterized by industry officials as a "temporary price disruption") to be the basis for exaggeration.

Permalink Reply by MJ on December 1, 2013 at 4:38pm

"That does not mean that is what the producers get.  In fact in much of Pa. nat gas is, or at least was a couple months ago, below $2."

This sounds like a load of Industry insider BS jim, not a very objective opinion I would think.  We need Truth here on this forum and I believe we are at under 20% - truth that is.  Beware people looking for facts - way too much biased "opinion" here.  Much disinformation and bias all carefully designed to influence the users of this site!  I believe the site's creator - Mr Mauck created this forum as a place to learn. Speak up people - landowners with questions.  There are some of us that know things, without an agenda, and will freely share our limited experiences.

Permalink Reply by Jim Litwinowicz on December 2, 2013 at 6:03am

Hate to be the bearer of bad news buts thats the Truth, with capital "T". This is a place to learn, sorry you don't like the Truth.  I suggest you go to the county sites for Bradford, Susquehanna, Potter, McKean, and others in that area to see what landowners have been posting. The gas in that area is what is called "stranded" meaning the production way exceeds what the pipelines can carry, thus it is selling at a discount.

As for the Leidy pricing, Leidy is an interstate transmission portal in extreme SW Pa, right on the WV border.  It is the price companies get when selling between suppliers in the interstate system. If you have a well nearby, you may get a comparable price.  But if the wells are 75 miles away, there will be transmission, pipeline, compression and other charges. It doesn't get there for free.

Permalink Reply by MJ on December 2, 2013 at 6:05am

Thanks for the enlightenment

Permalink Reply by Charles Randolph on December 5, 2013 at 4:19am

Been away for a few days .....I find myself often shocked at the amount of disinformation and unsubtantiated claims posted by some to this site. What is even more disturbing is that others gobble this garbage up without even doing the slightest bit of research on their own: Here are just a few examples:
Let's begin with this:
1) " Leidy is an interstate transmission portal in extreme SW Pa, right on the WV border. " In point of fact the Leidy Hub is situated HUNDREDS of miles away from West Virginia. It is the site of a huge underground gas storage serviced and utilized by several of the major carriers.
2) "for Bradford, Susquehanna, Potter, McKean, and others in that area to see what landowners have been posting. The gas in that area is what is called "stranded". Take a look on this very discussion thread at what LW shows to be CURRENT prices on this week's landowner statements from SE Bradford County, PA,. ALL OF WHICH are above $2.
3) Some other Northeast PA so-called "stranded" gas prices paid to landowners are shown at various other places on this site, one of which I quote: "currently there is a 60 cent difference between tgpz4 (Marcellus) at $2.71 and tgpz4 (sta-219) at $3.61"
4) The pricing of the Tennessee Gas "300 Leg" pipeline running west from Tioga County, PA (AND THROUGH THE AFOREMENTIONED SO-CALLED "STRANDED" GAS COUNTIES OF POTTER & MCKEAN) all the way into Mercer County, PA., not a single day in 2013 was pricing reported of less than $2, and some actually exceeded $4. One of my points being that it seems inexplicable to me why someone would take an extreme price from a limited example and try to portray that as more typical than it actually is.....Lovers of rumor-mongering ? Drama queens ? What was it that Sgt. Friday of Dragnet was famous for saying ? "Just the facts, Ma'am"

Permalink Reply by LW on December 5, 2013 at 5:53am

What I'd like to know is why there is always a difference in price, volume, etc for the same well reported from the different companies.  Also when gas prices are so low  the deductions  are felt more.     For the same statements below we received the following after deductions 

2 2.5 2.97
60% 79% 75%
$1.2 1.975

$2.23
Today's statements. SE Bradford county. 9/2013. Statoil -2.008, Mitsui- 2.50, Anadarko - 2.97.

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