Looks like we have a natural gas glut

Erik · Post by **Erik** » 03 May 2009, 16:10

I think RGR's comments on this thread have been pretty informative and he did manage to contain himself and avoid stooping to the levels of condescension he is famed for.

OK, it's not easy to forgive and forget someone who has been so disruptive in the past, but if he does manage to keep his posts "informative" without attempting to mock others' apparently less well-informed knowledge of his field then I for one would welcome his contributions.

But is such a thing possible RGR? Or will you also not be able to "help yourself" when it comes to maintaining general politeness?!

ziggy12345 · Post by **ziggy12345** » 03 May 2009, 17:52

RGR

None of your comments have proven your statment that I was "wrong on nearly every point" In fact most of them reenforce my claims.

You dont need to be a driller to own a drilling or prodcution company just as its quite natural for dentist and lawyers to own shares in fishing boats. The expertise is in the drillers and engineers with relevant experiance in the field.

Erik · Post by **Erik** » 04 May 2009, 10:47

RalphW wrote:Won't help us much in the UK

Exactly.

Looks like they have a natural gas glut, as forecast by the EIA in their latest Annual Energy Outlook:

Vortex · Post by **Vortex** » 04 May 2009, 19:38

I'll believe these tales if, after these discoveries have been reviewed a bit more, the US starts building Gas-To-Liquids plants and starts ramping down imported oil & gas imports.

The price of oil will fall during this of course, so at some point it might be cheaper to import 'real' oil than create oil from gas ... but overall we should expect a joyous announcement about 'US Energy Independence' any day now.

If such an announcement IS made then the world could become a very different place.

If however nothing seems to have changed in say 12-months time, then we will need to ask some questions ...

PS_RalphW · Post by **PS_RalphW** » 04 May 2009, 19:58

I will make a prediction for RGR to laugh at. In twelve months time, US will be paying more for natural gas than today. $3.30

biffvernon · Post by **biffvernon** » 04 May 2009, 20:22

Doesn't that depend less on whether there's much gas available and more on whether there's an economy that wants to use it

Erik · Post by **Erik** » 04 May 2009, 22:02

biffvernon wrote:Doesn't that depend less on whether there's much gas available and more on whether there's an economy that wants to use it

It also depends on (among others):
- whether or not US natural gas producers want to flood their home market with cheap gas to keep the price down (er, I don't think so!) or hold production back to keep the price high (but are they organised enough to operate in unison to achieve this? (I have no idea)).
- whether or not European gas buyers can find somewhere to dump the gas from their long term contracts in order to meet their anual take or pay obligations. They might have to chose between "paying for nothing" or cutting their losses by taking whatever price they can get from whichever market that has the physical capacity to receive it, i.e the USA, therefore driving the price down further in the States.
- whether or not non-conventional gas can be brought back on stream as quickly as it is needed. If not, then up goes the price again.

RalphW's prediction might be right, or it might not be, either way I can't imagine RGR laughing at it cos he has no idea where the price is going either!

RGR · Post by **RGR** » 05 May 2009, 00:16

[quote="RalphW"]

Vortex · Post by **Vortex** » 05 May 2009, 09:08

I suppose it comes down to whether the US finds any economic or political advantage in using externally sourced gas/oil.

Perhaps it's 'better' to burn another country's gas/oil whilst leaving yours in the ground?

For example, what would happen to Saudi if the US stopped buying their oil? Collapse into extremism? No more purchases of US goods?

Longer term the US will need foreign energy - so what will happen if they ignore the main foreign suppliers for 20 years ... and then go back asking for more oil?

It's a complicated calculation!

SILVERHARP2 · Post by **SILVERHARP2** » 05 May 2009, 09:42

RalphW wrote:I will make a prediction for RGR to laugh at. In twelve months time, US will be paying more for natural gas than today. $3.30

youd be agreeing with the futures market at the moment , I havnt checked recently but 6 mths to a year out was $6-7$

Vortex · Post by **Vortex** » 05 May 2009, 09:53

Hmm.

* Did the futures market predict this economic crunch?

* Did the futures market predict the recent wide swings in the oil price?

* Did the futures market predict swine flu?

It's now clear that we live in a fairly chaotic & unpredictable world.

Do these - or any - projections mean much anymore?

SILVERHARP2 · Post by **SILVERHARP2** » 05 May 2009, 10:25

Vortex wrote:Hmm.

* Did the futures market predict this economic crunch?

* Did the futures market predict the recent wide swings in the oil price?

* Did the futures market predict swine flu?

It's now clear that we live in a fairly chaotic & unpredictable world.

Do these - or any - projections mean much anymore?

True, you are as likely to see $20 oil and $2 natural gas in 6 months

DominicJ · Post by **DominicJ** » 05 May 2009, 13:27

I for one was interested in the facts RGR provided

fifthcolumn · Post by **fifthcolumn** » 05 May 2009, 17:49

fifthcolumn · Post by **fifthcolumn** » 05 May 2009, 17:58

fifthcolumn wrote:
Vortex wrote:
* Did the futures market predict this economic crunch?

The oil price futures market isn't attempting to predict the economic crunch, it's attempting to predict the price of oil based on known facts at the time.

For predicting EVENTS you need a predictions market.
As far as I know, the predictions markets do reasonaly well and ARE predicting swine flu futures.

In addition, the predictions markets say there is better than evens odds that the US will see positive growth by Q4 2009. It gives 90%+ odds that both the US and the UK will suffer at least a -10% drop in GDP between 2008 and 2009.

So you see, the markets ARE predicting the things you say they aren't.
Just not much more than a year or more into the future.

The best one I'm aware of is intrade.