Energy Prospectus

Macquarie: Spike in Nat-Gas Prices Could Come -- Market Talk
Published: Apr 14, 2014
US natural-gas inventories are at their lowest since 2003, but 1997-2001 might be a better comparison to today's market, says Macquarie, which argues futures prices for 2016 and 2017 don't reflect expected demand growth, making it hard for producers to lock in prices and increase production. From 1997-2001, output didn't rise as new natural gas-fired power generation came online, tightening supplies and sending prices from less than $2.50/MMBtu to around $10 in 2001. Now as then, "the supply side has the risk of being severely pinched," says Macquarie. Nymex May natural gas finished at $4.56.

I believe we will see natural gas way above $5.00/mcf by year-end.

I also believe it will take natural gas firmly over $6.00 before E&P companies commit more capital to drilling for gas.

Coal

Currently coal inventories are near the 2006 low and coal usage is continuing to be incentivized by the highest natural gas prices since 2011.

However, inadequate rail service is a near term hurdle for the industry that is hampering both the delivery of coal that is already contracted as well as impeding the signing of new coal contracts.

What the hell - it is good for O&G - for now. Not to forget - we will be next!

i just don't unstand how my generation survived with all these so called polutants. hell, when i was a kid it was great fun to play with mercury--slick up silver coins etc.