Hi All
Im quite amazed by the runup on oil and the flatness on N.G… I can’t believe ist’s due to demand. It will be intersesting on MON to see the the open. Is this due to N.K. or the the the market looking 6 Mos ahead? We seem to to have more oil in reserve than we have had in 22 years and plenty of gas in the ground. I have read(no cite) that we have 100 years in reserves in the ground. The only thing I can find is that rig’s are way down- to cheap to drill. This will be an intresting summer to see what oil top’s at. Anyone follow this? Please post your OP
You need to work on your presentation. Aside from this, you have some difficulty with conceptual understanding.
As I understand the market (and I’m far from an expert) the speculators who drove up the prices last time are starting to feel safe doing the same again. I don’t get the point of speculation - is it just gambling on the world market?? Seems like a huge money-suck…
Much as I hate seeing the price of gasoline going up again, maybe (yeah right) this time it will spur further investigation of alternatives. But it seems short-term profits will win. At least for a while.
What are N.G. and N.K.?
I’m guessing N.G. is natural gas. But N.K.? North Korea? Neanderthal Kittens?
If gasoline was really an open market item then it wouldn’t cost more in oil producing areas like southern California. A lot of it is dealt with in (retro voice) smoke filled rooms by gentleman’s agreements.
Oil demand is still weak, there is about 5.5 MMbbl/d excess capacity right now, compare that to about 1MMbbl/day of almost unusable oil excess capacity back last year when prices were at 140. OPEC compliance of its quotas is as good as can be expected so that is helping push prices up a little.
There is some concern that when actual demand returns there will be a serious lag in the ability to have production meet demand and we will be back to a very finely balanced supply and demand. There have been serious cut backs in development spending to the tune of 1.5 MMbb/day non OPEC production delayed or canceled, no one is quite sure how much future OPEC capacity has been delayed or cut.
Personally I think the markets are expecting a supply side related price rise down the line and the higher futures prices are putting pressure on todays spot price.
The price interactions between the natural gas and oil price in the US are fairly complex although they do follow each other to some degree, you may see some power generation switch to gas as oil prices rise which in turn puts upward pressure on natural gas prices. Recently the gas market in the US has become a little less isolated due to the influx of LNG shipments from places like Qatar. Oddly there is sufficient high value natural gas liquids coming in with the LNG shipments that it is almost worth dumping the gas onto the market as the NGLs make a healthy profit. This may be offsetting an expected future natural gas price spike related to reserve replacements which is all related to the active rig count.
A significant number of the rigs in the US land market are used for natural gas (NG from here on in) drilling, when NG prices drop, the rigs get laid down quickly as operators aim to cut cost rapidly. Gas wells broadly speaking don’t produce for a long period of time, so they will eventually stop producing and supply drops off rapidly. The sudden drop of supply , combined with a cold winter and draw down in stocks leads to a sudden NG price rise. at that point everyone goes back drilling, however it takes 6-9 months to get wells drilled and production back up. This leads to a very cyclical gas price and rig count. The aforementioned LNG imports may be helping to smooth this out somewhat and are probably helping suppress the NG prices a little which might be leading to a divergence from the traditional NG - Oil price relationships.
- Natural gas liquids are hydrocarbons separated out from gas as a liquid (ethane propane butane lease condensate) and are high value
** LNG is liquefied natural gas which is mostly methane cooled and compressed to a liquid form, but may also contain some of the NGL mentioned above.
You know that you can’t pump oil out of the ground and pour it into your gas tank, right? There are these things called refineries.
And I assume you’re also aware that California has the third highest gasoline tax in the nation.
This reads almost exactly like one of those spam messages with a link to free Viagra. Uncanny.
Did anyone else besides me think the OP was talking about santorum?
You are in no way alone. 
I’ve been invested in a Can refiner with both upstream and down stream ast.s There seems to be no sweet spot for this buss. model. Maybe somebody could speak of the ideal crack spread/curr. situation. This stock used to pay .30 a share per month when oil was 65 USD. I think the drop in N.G. and the hedging of futures has killed this co. in the short term. BTW they are a 110,000 bpd sour cude plant so they dont buy WTI or Brent. They buy s/c , blend most to diesl. and heating oil. Now pay’s 0.5 a share in less than a years time G.L.T.A.
Gas trades everyday on the open market as R.F.B.O.B. as does Heating Oil. State taxes have a lot to do with retail price as they do with anything anymre.
Gas trades everyday on the open market as R.B.O.B. as does Heating Oil. State taxes has a lot to do with retail price as they do with anything .
Being a jerk is the least of your issues in this thread.