Natural gas price to spike when USA is out of the market

[zextaz + 20]

I am suspecting that natural gas prices will skyrocket when usa energy goes down to 0 barrel a day in the next few month 

[Douglas Buckland + 6,308]

I suspect that we have more of a chance that the sun rises in the west before US production goes to zero in the next few months.

Where/How did you come up with that scenario?

[zextaz + 20]

if you are not in favor of my topic name me 1 American business that can make profit at 40$ under a barrel and attract investor??

and explain how when all reserved of natural gas are at lowest level ever it couldn't bounce back , as per my personal knowledge there is almost 0 reserve for natural gas since shall produce so much natural gas as a byproduct that no one is stocking it they get it for almost free now vs other country like japan as per example or EU where natural gas trade 3x the price

[zextaz + 20]

the scenario is simple OPEC and Russia did no agree and Saudi said we are all IN so now its no longer a price increase war but a production war only way they will make more money is by making more product Saudi have a 5$~ish price per barrel extraction price vs USA of 50 to 60 ish price per barrel if they go all in market could bring oil to 20$ and less a barrel since most shall producer are giving natural gas for free as a byproduct the prices of this commodity is pretty low to the real value (shall make profit on oil extraction and discard massive natural gas byproduct) if oil goes low the natural gas price should go higher no?

[Douglas Buckland + 6,308]

 

“if you are not in favor of my topic name me 1 American business that can make profit at 40$ under a barrel and attract investor??”

Let’s try Ford, Boeing, Staples, or any other American firm not dependent on the price of oil.

In your ‘rush to rant’ you did not specify what industry the American business named had to be associated with....rant on!👍🏻

 

 

[0R0 + 6,251]

6 hours ago, zextaz said:

the scenario is simple OPEC and Russia did no agree and Saudi said we are all IN so now its no longer a price increase war but a production war only way they will make more money is by making more product Saudi have a 5$~ish price per barrel extraction price vs USA of 50 to 60 ish price per barrel if they go all in market could bring oil to 20$ and less a barrel since most shall producer are giving natural gas for free as a byproduct the prices of this commodity is pretty low to the real value (shall make profit on oil extraction and discard massive natural gas byproduct) if oil goes low the natural gas price should go higher no?

The all in cost is not the point, but the cash cost is. The "survivors" would be the better companies and will buy the bankrupt drillers for stock and will have little debt to service, they can frack at $40. Besides which, many in the shale patch sold forward their production so are hedged to over 50% of output this year. Those that just stuffed short futures for their hedge portfolios will be swimming in cash right now. 

There is only 1.1 mob/d of spare capacity in the former OPEC+. Russia hasn't reduced much this tie round. So yes, it is indeed possible that prices would fall to <$30, it  won't be for long, Saudi is offering crude at as low as $35 for those that switch from Russian. 

A large portion of the reduced consumption is going into strategic storage.

While your analysis definitely has merit, I expect that gas supply will continue as shale wells become gassier as they mature. 

[footeab@yahoo.com + 2,190]

17 hours ago, zextaz said:

I am suspecting that natural gas prices will skyrocket when usa energy goes down to 0 barrel a day in the next few month 

I believe this gets the A+++ post rating at the credit bureau of opinions

[George8944 + 128]

17 hours ago, zextaz said:

1 American business that can make profit at 40$ under a barrel and attract investor??

Oh you would be surprised.  A couple thoughts.  First you are correct with your long term assessement.  At $40/ barrel there probably isn't a US producer that could stay in business as an on going concern.  Second, let's say breakeven is $45,  they will stay alive longer selling at $40 (losing $5/barrel ) than just closing the doors.  They may not attract investors, but they will attracts buyers. In the near term there are many large global companies that could sustain this kind of loss and will swoop in to buy these distressed assets.   Output will not go to zero.  Heck!  Even the Saudis can't sustain $40/barrel without crashing their economies.  They tried this before.

[ronwagn + 6,290]

20 hours ago, zextaz said:

the scenario is simple OPEC and Russia did no agree and Saudi said we are all IN so now its no longer a price increase war but a production war only way they will make more money is by making more product Saudi have a 5$~ish price per barrel extraction price vs USA of 50 to 60 ish price per barrel if they go all in market could bring oil to 20$ and less a barrel since most shall producer are giving natural gas for free as a byproduct the prices of this commodity is pretty low to the real value (shall make profit on oil extraction and discard massive natural gas byproduct) if oil goes low the natural gas price should go higher no?

Natural gas demand in the Northern Hemisphere is dropping until summer air conditioning is needed. 

[ronwagn + 6,290]

13 hours ago, 0R0 said:

The all in cost is not the point, but the cash cost is. The "survivors" would be the better companies and will buy the bankrupt drillers for stock and will have little debt to service, they can frack at $40. Besides which, many in the shale patch sold forward their production so are hedged to over 50% of output this year. Those that just stuffed short futures for their hedge portfolios will be swimming in cash right now. 

There is only 1.1 mob/d of spare capacity in the former OPEC+. Russia hasn't reduced much this tie round. So yes, it is indeed possible that prices would fall to <$30, it  won't be for long, Saudi is offering crude at as low as $35 for those that switch from Russian. 

A large portion of the reduced consumption is going into strategic storage.

While your analysis definitely has merit, I expect that gas supply will continue as shale wells become gassier as they mature. 

How do natgas, gasoline, oil, and diesel storage volumes compare in America and around the world? Would appreciate info from anyone else also. 

[Gerry Maddoux + 3,627]

Ron, everything is filled to the gills. 

This is the perfect storm. 

From this will emerge a new world order--and in it Saudi Arabia will play a gelded role. 

The organization known as OPEC has essentially been told to fiend for themselves. That will be third-class turmoil. 

Prices will seek the lowest levels possible. 

 

[KeyboardWarrior + 527]

20 hours ago, zextaz said:

if you are not in favor of my topic name me 1 American business that can make profit at 40$ under a barrel and attract investor??

and explain how when all reserved of natural gas are at lowest level ever it couldn't bounce back , as per my personal knowledge there is almost 0 reserve for natural gas since shall produce so much natural gas as a byproduct that no one is stocking it they get it for almost free now vs other country like japan as per example or EU where natural gas trade 3x the price

All business make profits if the price of energy is low. Are you high? I'd invest in airlines since fuel is a serious cost for them (but I won't due to the virus scare) 

[Chris Tarjeft + 22]

The primary reason your assessment is WRONG even if it is CORRECT.  Saudi and Russians are selling those barrels for $20 in today dollars (already a joke compared to what $20 in today dollars buy).  Fast forward to one year from now when the buying power of the same $20 is not even a cheese sandwich.  What do you think? They will be interested in selling oil for the cost of a pack of bubble gum?  No matter how you want to fantasize about the U.S. Oil industry collapsing, it will not happen.  Some shale and oil producers are likely going to file for bankruptcy, that does not mean they will simply disappear, someone else will scoop up the assets for pennies on the dollar and keep producing.  The cost per barrel is not a "set in stone" figure it is relative to the cost of everything else.  There may be some short term suffering but the cost to produce will simply go down if prices are down and up if prices are up with enough time.  

[Prometheus1354 + 178]

On 3/7/2020 at 11:00 PM, zextaz said:

the scenario is simple OPEC and Russia did no agree and Saudi said we are all IN so now its no longer a price increase war but a production war only way they will make more money is by making more product Saudi have a 5$~ish price per barrel extraction price vs USA of 50 to 60 ish price per barrel if they go all in market could bring oil to 20$ and less a barrel since most shall producer are giving natural gas for free as a byproduct the prices of this commodity is pretty low to the real value (shall make profit on oil extraction and discard massive natural gas byproduct) if oil goes low the natural gas price should go higher no?

What does the price of a barrel of Oil have to do with the the price of Natural Gas??  What is your 'source' for price per barrel comparisons??

[zextaz + 20]

i was saying it would go to 0 in price not in production it went to -37 for WTI no long ago i guess i was right now let see the gas price spiking up in the next few month :)

[zextaz + 20]

i mean american businesses related to oil not ALL american businesses.. i am pretty sure alot of american bank did tons of money shorting the paper oil market

[Rob Kramer + 696]

58 minutes ago, zextaz said:

i was saying it would go to 0 in price not in production it went to -37 for WTI no long ago i guess i was right now let see the gas price spiking up in the next few month

I dont think it will last past 2022 (high NA ng price)  but ya close enough wells drop enough rigs and have a cold enough winter and your all set for a price spike (in nat gas). But gotta remember that gas will again be the byproduct (because it's not transportation fuel and its costly and inconvenient to swap the entire fleet over) and that gas wells flow way more than oil so they can catch up to demand quicker.  I'm more interested in rig count and frac fleets surviving after 2020. Gonna be alot of pain in service industry everyone calling off majority of business globally. OH and last thing about gas is a big use is for electricity or heat and electricity and electric heat can be made from renewables and nuclear and coal. And of the demand that is exported can be reduced so theres a cap on prices (not to be confused with a temporary high as in a spike ) . I'm long gas if you cant tell lol.

Edited April 24, 2020 by Rob Kramer
Added brackets

[zextaz + 20]

from 1.88 in march 2020 to 6$ in march 2022 that was a pretty good call it did spike by 350% in 2 year🤣

 

[zextaz + 20]

in meantime natural gas stock like OVV gained 2000% in value since i posted this 😆