Natural Gas
- Thread starter matt
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- Oct 22, 2007
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- 1,191
Hi Matt,
I have not been following the gas price closely, however, in my opinion it bottomed last year coinciding with Alberta`s royalty review. Since then prices have recovered to the 7-8 dollar level. In North America, we still pay a lot less for gas, in particular LPG, than elsewhere in the world hence a very moderate amount of LPG is imported into North America. In the mean time, Alberta`s gas exploration has significantly dried up and since royalties are to go up with gas prices I foresee a very modest drilling recovery. B.C. and Saskatchewan as well as states such as Texas are benefitting from Alberta`s misguided natural gas policies and companies like Encana have been investing big time into `non-conventional gas`. The problem however lies in the word `non-conventional`, i.e. expensive and difficult to produce.
Thus my take on the gas market is that prices are already higher prior to the winter season, so short term prices are likely to spike up once the weather turns cold. Long term, we don`t find enough new gas to fuel the unavoidable economic recovery especially when coupled to a few cold winters and hot summers. So long term, prices will go up as well as a minimum equaling international gas prices (after which LPG imports will once again become attractive).
Internationally matters don`t look rosy either. Russia is grandstanding, bullying the world while its natural gas exports are being used as a political weapon. Europe feels so threatened it is apparently locking in coal contracts, imagine that green Europe buying up coal! This combined with the few opportunities for private investment outside North America, makes me think that the gas price overseas will likely increase especially when we have the unavoidable global economic recovery.
Hope this gives you some ideas as to whether you want to lock in gas prices. By the way, did you hear Don`s outlook on electricity pricing last night in Calgary?
I have not been following the gas price closely, however, in my opinion it bottomed last year coinciding with Alberta`s royalty review. Since then prices have recovered to the 7-8 dollar level. In North America, we still pay a lot less for gas, in particular LPG, than elsewhere in the world hence a very moderate amount of LPG is imported into North America. In the mean time, Alberta`s gas exploration has significantly dried up and since royalties are to go up with gas prices I foresee a very modest drilling recovery. B.C. and Saskatchewan as well as states such as Texas are benefitting from Alberta`s misguided natural gas policies and companies like Encana have been investing big time into `non-conventional gas`. The problem however lies in the word `non-conventional`, i.e. expensive and difficult to produce.
Thus my take on the gas market is that prices are already higher prior to the winter season, so short term prices are likely to spike up once the weather turns cold. Long term, we don`t find enough new gas to fuel the unavoidable economic recovery especially when coupled to a few cold winters and hot summers. So long term, prices will go up as well as a minimum equaling international gas prices (after which LPG imports will once again become attractive).
Internationally matters don`t look rosy either. Russia is grandstanding, bullying the world while its natural gas exports are being used as a political weapon. Europe feels so threatened it is apparently locking in coal contracts, imagine that green Europe buying up coal! This combined with the few opportunities for private investment outside North America, makes me think that the gas price overseas will likely increase especially when we have the unavoidable global economic recovery.
Hope this gives you some ideas as to whether you want to lock in gas prices. By the way, did you hear Don`s outlook on electricity pricing last night in Calgary?
QUOTE (gwasser @ Sep 18 2008, 10:00 AM) Hi Matt,
I have not been following the gas price closely, however, in my opinion it bottomed last year coinciding with Alberta`s royalty review. Since then prices have recovered to the 7-8 dollar level. In North America, we still pay a lot less for gas, in particular LPG, than elsewhere in the world hence a very moderate amount of LPG is imported into North America. In the mean time, Alberta`s gas exploration has significantly dried up and since royalties are to go up with gas prices I foresee a very modest drilling recovery. B.C. and Saskatchewan as well as states such as Texas are benefitting from Alberta`s misguided natural gas policies and companies like Encana have been investing big time into `non-conventional gas`. The problem however lies in the word `non-conventional`, i.e. expensive and difficult to produce.
Thus my take on the gas market is that prices are already higher prior to the winter season, so short term prices are likely to spike up once the weather turns cold. Long term, we don`t find enough new gas to fuel the unavoidable economic recovery especially when coupled to a few cold winters and hot summers. So long term, prices will go up as well as a minimum equaling international gas prices (after which LPG imports will once again become attractive).
Internationally matters don`t look rosy either. Russia is grandstanding, bullying the world while its natural gas exports are being used as a political weapon. Europe feels so threatened it is apparently locking in coal contracts, imagine that green Europe buying up coal! This combined with the few opportunities for private investment outside North America, makes me think that the gas price overseas will likely increase especially when we have the unavoidable global economic recovery.
Hope this gives you some ideas as to whether you want to lock in gas prices. By the way, did you hear Don`s outlook on electricity pricing last night in Calgary?
Thanks for the update. I`ve had my head in the sand for a while. Travelling and working.
I have not been following the gas price closely, however, in my opinion it bottomed last year coinciding with Alberta`s royalty review. Since then prices have recovered to the 7-8 dollar level. In North America, we still pay a lot less for gas, in particular LPG, than elsewhere in the world hence a very moderate amount of LPG is imported into North America. In the mean time, Alberta`s gas exploration has significantly dried up and since royalties are to go up with gas prices I foresee a very modest drilling recovery. B.C. and Saskatchewan as well as states such as Texas are benefitting from Alberta`s misguided natural gas policies and companies like Encana have been investing big time into `non-conventional gas`. The problem however lies in the word `non-conventional`, i.e. expensive and difficult to produce.
Thus my take on the gas market is that prices are already higher prior to the winter season, so short term prices are likely to spike up once the weather turns cold. Long term, we don`t find enough new gas to fuel the unavoidable economic recovery especially when coupled to a few cold winters and hot summers. So long term, prices will go up as well as a minimum equaling international gas prices (after which LPG imports will once again become attractive).
Internationally matters don`t look rosy either. Russia is grandstanding, bullying the world while its natural gas exports are being used as a political weapon. Europe feels so threatened it is apparently locking in coal contracts, imagine that green Europe buying up coal! This combined with the few opportunities for private investment outside North America, makes me think that the gas price overseas will likely increase especially when we have the unavoidable global economic recovery.
Hope this gives you some ideas as to whether you want to lock in gas prices. By the way, did you hear Don`s outlook on electricity pricing last night in Calgary?
Thanks for the update. I`ve had my head in the sand for a while. Travelling and working.
- Joined
- Aug 2, 2008
- Messages
- 7
QUOTE (matt @ Sep 18 2008, 02:21 AM) Just wondering if anyone knows where we sit in the cycle. Should we wait to lock in till next year? If I remember correctly we are in the high part of the cycle...?
Owning and running A heating company in Barrie Ontario, I have had a fair share of customer complaints about the utility companies as well as others in the industry that sell gas, the claim of "locking in" the rates can sometimes be presented in a dishonest or misleading way. Make sure that you read the fine print and any clauses that state certain reasons why they can over rule your "locked in " rates. you may find that the simplest reason can unlock those rates if the company feels they are loosing too much money.
For the most part, the majority of the sales people are honest but there are a few bad apples out there that you must be carefull about.
must read the fine print!
Jason
Owning and running A heating company in Barrie Ontario, I have had a fair share of customer complaints about the utility companies as well as others in the industry that sell gas, the claim of "locking in" the rates can sometimes be presented in a dishonest or misleading way. Make sure that you read the fine print and any clauses that state certain reasons why they can over rule your "locked in " rates. you may find that the simplest reason can unlock those rates if the company feels they are loosing too much money.
For the most part, the majority of the sales people are honest but there are a few bad apples out there that you must be carefull about.
must read the fine print!
Jason