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San Juan Basin Royalty Trust Message Board

  • underredflag underredflag Mar 30, 2006 3:17 PM Flag

    NGas huge drawdown

    -104 Bcf? It can't be due to the cold weather, then it must be something else that consumed more gas than before.

    I've recently unloaded half of my PBT and SJT position waiting for a pull back. Maybe the luck is working against me, though as always :-)

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    • hotpanera2,

      Yes, Boone Pickens predicted the fall in NG about 3-months back. At the time, there were some predictions of $20 NG, and Boone offered his wisdom on both oil & NG at the time. Cannot give you link.

      Boone has a lot to offer given many years of experience in sector, and contacts & associates experience to draw on.


    • I have a lot of respect for Pickens. But, someone correct me if I'm wrong, when NG was near $15, I don't recall him predicting a more than 50% decline if 1 winter month turned out to be mild. That would have been some prediction. I do remember him speaking of a risk of going to 7 or lower once we were at 8 or so. I could be wrong and would really like to hear the facts. Thanks.

    • << ... it must be something else that consumed more gas than before. >>

      A few GUESSES:

      1)The Gulf Coast chemical industry was shut down by the hurriucanes along with ng production facilities. I suspect it is ramping back up and supporting ng prices somewhat.
      2) Coal stockpiles at power plants remain below average and transportation seems maxed out. Some switching to ng to build coal stockpiles would seem reasonable now.
      3) LNG is not coming on-line as fast everyone thought it would. LNG world prices are much higher than domestic pipeline gas and offer litle incentive to make the cap ex. A little nervousness about future supplies might be in play.
      4) As a % of usage, ng storage is not nearly as high as it looks in absolute mcf. Hot weather from LA to Atlanta can draw them down in a hurry.


    • CNBC reported yesterday that in the past month several large utilities converted back from coal to ng due to the lower ng prices.

    • Now is the time to buy some XLE puts!!


    • The other way of looking at it is, we're too stupid to make sense of the TA charts (don't get me wrong, I'm not being critical of you because I'm in the same boat you are) - there's TA guys all over the msg boards touting how much money they've been making flitting about here and there. Thing is, I never read about them ever having a losing trade. Maybe they never do?

      Re EGSR - forthcoming well production numbers will be very important, IMO. Also will be interesting to see the variance between ind. well production rates. Good luck.

    • Boone Pickens was on CNBC today and said NG would fall in price. He is usually right.

    • NGas huge drawdown

      I have recently read that at the current 8:1 price ratio of oil to NG, fuel switching is occurring amoung the dual fuel industrial and commercial NG consumers. This happened in reverse when NG hit $15 in the winter. Plus there has been cold weather on the west coast. It has been 5-10 degrees cooler than average for the season in CA for the last two weeks. I usually have my heat turned off by this time of the year, but it is still needed this year.

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