Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter On Friday, when stocks were plunging, natural gas soared 9.6% to $5.18 per million British thermal units (MMBtu) at the Henry Hub. Up 20% for the week. The highest close since June 2010.
As part of our series looking at the future of American energy, The Financialist spoke to Osmar Abib, global head of Credit Suisse’s oil and gas investment banking group, about the rise of natural gas production in the U.S., thanks in large part to the development of shale gas fields.
The shale drilling revolution that has allowed natural gas producers to access vast, previously unreachable resources has already had a profound impact on the U.S. energy sector, but what that means for the broader economy and global trade is a larger question.
You may have to pay a little more for heating this winter, but you won’t be burning dollars. Canadian heating prices are expected to spike, although in many cases they will still be relatively low, industry reports suggest.
As cold weather moves in and grips the Northeast, natural gas investors are increasingly boosting exposure to producers benefiting from the winter season storage drawdown. Despite overall U.S. natural gas in storage remaining 1.7% above the 5-year average, national storage remains within the 5-year range, with east coast storage running 5.7% below normal and west coast storage in line at 0.3% above average.
The hybrid model is the joint production of natural gas and gas liquids, or natural gas and light oil, or all three, from relatively narrow and fairly difficult to delineate "windows" within extensive shale and tight sands (TS) natural gas basins. The marginal cost of producing the liquids or oil is quite low while the gross profit contribution is very high because on a per Btu basis the liquids are several times more valuable than the natural gas.