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EnvestorFirst (< 20)

Are Peak Nat Gas Prices Possible?



September 07, 2011 – Comments (2) | RELATED TICKERS: USO , UNG , XOM

Will natural gas prices ever go up? I think this a question that many of us natural gas enthusiasts have been asking ourselves recently. There has been talk of this for so long, but will it ever happen? Paul Ausick shares his point of view on the topic. 


" The price of natural gas was decoupled from crude prices in 2007 and has never recovered. For a time in 2006, natural gas flirted with prices around $14/tcf, but that didn’t last long. The difference is due almost entirely to scarcity. Will natural gas recover even a little during 2011 or 2012? And how high will natural gas prices go?

The US Energy Information Administration projects an average price for natural gas of $4.24/tcf by the end of 2011, which is $0.15 lower than the average price in 2010. In 2012, the EIA expects a natural gas price of $4.41/tcf. In order to make a profit on natural gas, the industry needs a price in the range of $6-$8/tcf. That’s certainly not going to happen in the next 16 months unless some event of Biblical proportions should occur.

The 10 largest producers of natural gas in 2009 (the last year for which figures are currently available) were, in order, Exxon Mobil Corp. (NYSE: XOM), BP plc (NYSE: BP), Chesapeake Energy Corp. (NYSE: CHK), EnCana Corp. (NYSE: ECA), ConocoPhillips Corp. (NYSE: COP), Devon Energy Corp. (NYSE: DVN), EOG Resources, Inc. (NYSE: EOG), Anadarko Petroleum Corp. (NYSE: APC), Ultra Petroleum Corp. (NYSE: UPL), and Questar Corp. (NYSE: STR). Exxon’s top ranking includes its acquisition of XTO Energy, which had not officially been completed in 2009."


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2 Comments – Post Your Own

#1) On September 07, 2011 at 3:14 PM, leohaas (30.08) wrote:

Not until we wise up, and start using it for fueling our cars. Supply is large and increasing faster than we use the stuff because of improved technology. We have plenty of it, right here in the US.

Unlike oil. That comes mostly from foreign countries, some of which hate our guts. We keep on sponsering the terrorists with our oil dollars!

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#2) On September 07, 2011 at 5:20 PM, EnvestorFirst (< 20) wrote:

I agree. We need to start making cash of exporting it, or support ourselves from it. I'm definitely leaning towards the later as well. 


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