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Linn Energy, LLC Message Board

  • norrishappy norrishappy Mar 2, 2013 4:10 PM Flag

    SP OIl Gas Industry outlook

    Global supply growth, mainly stemming from North
    America, is expected to outpace higher global
    demand in 2013 and 2014. As of January 2012, using
    S&P Capital IQ estimates based on data from IHS
    Global Insight, West Texas Intermediate (WTI) spot
    oil prices were projected to average $89.80 per
    barrel in 2013 and $86.88 in 2014, versus $94.21 in
    2012. The price differential for WTI versus Brent has
    widened to about $21-$22 per barrel as of February
    22.
    For U.S. natural gas, we look for low prices to
    depress U.S. gas drilling activity. According to the
    EIA, after growing 8% and 4% in 2011 and 2012,
    respectively, natural gas production is expected to
    rise 1% in 2013, before a modest decline in 2014.
    Natural gas working inventories, as of February 15,
    2013, were 18% above the five-year average. As of
    January, based on data from IHS Global Insight,
    S&P Capital expects Henry Hub spot prices to
    average $3.72 per million Btu in 2013, rising to $4.85
    in 2014, as markets begin to balance late in the year,
    versus $2.59 in 2012.
    Year to date to February 15, the S&P Integrated Oil &
    Gas Sub-Industry Index was up 4.7%, versus a 6.9%
    rise in the S&P 1500 Composite Index. In 2012, the
    sub-industry index was down 0.6%, versus

    I agree with it and find the natural gas interesting. Some analysts had felt natural gas would be at $3.50 or $4.00 now based on decline rates. Seems the technology and the connections to Bakken were a little better than model. Any one care to guess how the value of LINE would change if spot ng prices did increase to $4.85 or marginal price of production? It will happen as things are but I would not bet on 2014 as Obama will still be Prez.

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