Thursday, November 15, 2012

"Natural Gas Prices Could Return To The Traditional Oil To Gas Conversion Ratio In 2013"

From a Seeking Alpha article,

"EIA Weekly Storage Report reported a draw of 18 Bcf for the week ended Nov. 9, 2012. Based on the weather forecasts, there won't be any more injections into storage this fall. Storage peaked with last week's report at 3,929 Bcf, which is well below current storage capacity estimated by the EIA to be over 4.2 Bcf. [...] The biggest determinant of natural gas usage is always weather. Last winter's fourth-warmest temperature on record, combined with excessive drilling because of past hedges and efforts to hold acreage by production, is what created the huge storage glut. But now, according to the EIA, storage is only 71 Bcf higher than last year and within 100 Bcf of the last three mid-November reports. This means the storage glut is basically gone and natural gas prices will be driven by weather and 2013 production."
I understand Apple and the high yield crap selling off post-election. I don't understand why natural gas equities and especially royalty trusts like CHKR are falling. The commodity is doing fine. Interest rates fell after the election. Maybe just falling in sympathy? I wish I had bought more Conrad, which had been falling in sympathy. Results are out tonight and they blew the doors off. Maybe that will happen with the natural gas names too.

No comments: