Barron's: "Expect a Near-Term Pause in Gas Prices"

From a Barron's piece,

While there remains upside optionality to gas prices over the next 18 to 24 months, absent an extremely cold winter, we highlight five reasons why a near-term pause in pricing is likely: 1) Stronger-than-forecast Haynesville production; 2) Drilling efficiencies in dry gas basins are temporarily mitigating the collapse in gas-drilling activity; 3) A near-term surge is likely in Marcellus production from infrastructure projects; 4) Continued ethane rejection in the Rockies and Mid-Continent, which is boosting gas supply; 5) Market-share losses to coal as switching economics no longer favor gas in all regions.

I do worry about this. The natural gas supply situation has benefited a lot from coal to gas switching, however what was once a floor now acts as a ceiling on the way up. A cold winter would be bullish, but another really warm winter could be ruinous. This is a very interesting test of belief in global warming. If you think the warm 2011 winter was because of the effect of the Arctic oscillation on the jet stream, you wouldn't necessarily expect it to repeat itself (and have an ultra warm winter with NG price crash).

All the same, do you want to have to take a position on winter 2012 weather? No thanks.