<So what is driving nat-gas lower and crude oil higher,
taking the ratio out the levels that would have seemed
utterly impossible a year ago? New and huge supplies
of nat-gas, that is what. Nat-gas supplies are coming
to the market in size, and although there are new
“finds” of crude oil in places such as Gabon, and
Cabinda off shore of Angola, and of course in the
massive Tupi reservoirs that are being exploited off
shore by Petrobras in Brazil, the new sums of nat-gas
being found quite literally dwarf them. These new
sources, found in shale gas
deposits, coal bed methane
deposits and other more
conventional gas deposits
are far more readily
available to end users than
are these crude oil
reservoirs. We have them here in the US, and the
Russians are finding more and more new gas every
day. Russia, to this end, is looking to add a large
number of new LNG tankers to its fleet that will get this
gas to the markets in Europe and N. America. Yes, it
may take a while before that gas is actually available to
the markets, but the market knows they are there and
the market fears their advent.
A comment in yesterday’s FT by Mr. Nikos Tsafos, the
senior analysts for “upstream nat gas” for PFC Energy
Group caught our attention. When noting how large
these new sources of nat-gas were but how difficult it
may be to get them to market, Mr. Tsafos said
You are talking about massive new resources,
[and] even if you only got 10 per cent of that,
given the need for economic viability at each
formation, you would increase the reserve
base globally by 50 per cent.
That is an attention grabbing statement. If 20 per cent
were viable, then the world’s reserve doubles!
Certainly it has our attention, and it should have the
attention of those who keep trying to find a top to the
crude:nat-gas ratio.>
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