Canadian Oil & Gas Companies Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian Oil & Gas Companies

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Kerm Yerman who wrote (3685)	9/15/1997 2:21:00 AM
From: Richard Saunders	of 24939

Kerm/ not sure of where to find timely spot prices for Empress. Do know that Empress is approx. due east of Calgary and is on the Alta./ Sask. border and a recognized inlet to the TCPL system for moving gas........ about gas prices - bottomline, another "don't know." Do know that spot prices for natural gas are among the most volatile of commodities and that the Empress spot prices have even more volatility (1.8X ish) than Henry Hub and 3.5x more than WTI crude pricing. I also believe that the El Nino (I know you feel the weather forecasting thing is poohey) is a happening thing and that it's going to likely have an impact on more gas pricing volatility....... Also, it's my understanding that gas prices on NYMEX are also possibly setting themselves up for some future volatility over the next several months. Something I was recently looking at indicated that open interest on nat. gas options would "normally" be around 40,000 contracts. Current open interest is between 50K & 60K. analysis went on further to indicate that the "extra" contracts were primarily US fund-mgrs. speculating in long interest positions (something like 16:1 ratio long/short). This was viewed as one of the reasons why current us NYMEX prices are "high" as Scott Mc indicated in prior post...... anyways, tho't was that once the "long" sentiment changes the momentum will turn the tide in a fairly dramatic order and it's quite possible you'll see an over-reaction towards lower gas prices as the fund mgrs. unroll positions. . What's likely to begin to change the supply/demand & sentiment? Uh-huh, effects of what's coming as a result of El Nino. According to the weather guys it would seem quite likely that the upper winds this winter (jet streams at approx. 250mb pressure level) will be ensuring a fairly strong West-Eastward flow coming off the Pacific Ocean at calif. and proceeding eastward across the continent. The upper jet is what brings accompanying weather patterns. I realize this sounds too predictable but according to climatologists the current strength of the developing El Nino is currently on target to be the most powerful of the century. Extended arctic outbreaks of extremely cold temperatures aren't apt to entrench in place for several weeks at a time. The relatively warm and fast-moving west-east flow will prevent extended cold from locking into place in the US. So............ forecasted warm winter likely won't do a whole lot to gas demand. also, last year there were something like 12,695 wells drilled in Canada. This year the number will be around 15,000. Of those wells drilled last year 3,721 were successful gas wells (3,847 in '95). In 1994 there were around 5,370 gas wells completed. he point I'm trying to make is that although we're likely still under the '94 drilling level we are approaching (in my opinion) a level where an increasing gas supply may be happening. If this occurs then I don't see prices moving too far ahead either........ who knows???????.......... one thing for certain is that the already volatile natural gas prices will likely become even more so. Time'll tell. Finally, not sure if I picked up an article of "your Korner" but did see an article out of the Finacial Post in August which presented a much more bullish view. I believe consensus gas prices for next 6 months were around $1.75 - $1.80/mcf (Cdn. spot) and some analysts were looking for avg. prices closer to $2. If I find the article I'll re-post. Any other views?..........

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next