Wednesday, June 27, 2012

"Exxon CEO says low US natgas prices not sustainable"

"Current prices for U.S. natural gas are not sustainable for the energy industry to continue to cover the cost of finding and producing new supplies, the head of Exxon Mobil said Wednesday."
Expect the rally to continue...

7 comments:

Stagflationary Mark said...

Expect the rally to continue...

I did a few long-term charts today. I see nothing to dispute your theory.

Real Natural Gas

CP said...

"If I could hoard natural gas at the wellhead, I'd certainly be tempted to do it now. If history is any indicator, natural gas at the wellhead is currently priced for the bargain bin."

I've been saying - natural gas would be much better to hoard than silver.

Stagflationary Mark said...

CP,

If I could, I would certainly hoard enough natural gas to heat my home over the next 30 years. Assuming that I could store it safely, what's the harm?

I have hoarded silver big time in the past (from 2004 to 2006). It worked out very well the one time I tried it. One and done.

I am currently hoarding all the silver I will personally consume directly over the next 30 years. That works out to a one-ounce silver dollar, a 1964 half dollar, and a 1963 quarter. Call me sentimental.

C. Fischer said...

Mark,

At $2-3/MCF, I'd be very happy to lock that in, but storage costs are never zero and the price today will not last and we will be above $4-5/MCF sooner than people think.

Just purchasing it today and selling it 18 months from now, you can lock in a 43% profit, if you could store it.

I'm not in the industry so I don't know what price 10-20 year supply arrangements are being struck at, but I'd guess around $5-6/MCF.

C. Fischer said...

Mark,

At $2-3/MCF, I'd be very happy to lock that in, but storage costs are never zero and the price today will not last and we will be above $4-5/MCF sooner than people think.

Just purchasing it today and selling it 18 months from now, you can lock in a 43% profit, if you could store it.

I'm not in the industry so I don't know what price 10-20 year supply arrangements are being struck at, but I'd guess around $5-6/MCF.

CP said...

5-6 would look good for CHK?

CF What do you like right now?

C. Fischer said...

I like ECA and CHK. I've been selling some calls against my CHK common - the premiums are pretty generous.