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Denbury Resources Inc. Message Board

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  • harehau harehau Aug 11, 2008 1:59 PM Flag

    It may not mean much but the patterns are cool

    All, major piece in WSJ on nat gas "glut". Production up 9%, consumption up 5.5% driven by electricity generation. Analysts think supply will shrink at $8, a self-correcting mechanism. Most of the unconventional players need capital to develop the reserves and won't have it with reduced cash flows. LNG terminals will once again be closed. The shales could add 850 tcf of reserves giving the US over 2000 tcf of reserves, half of the reserves of Saudia Arabia on an oil equivalent basis. Gas generates 20% of our electricity and heats half of our homes. Hare

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    • Hare,

      "Analysts think supply will shrink at $8, a self-correcting mechanism."

      Raymond James in the past has euphimistically called this gas-on-gas substitution. My honest belief is that it will not happen like that until the fall when storage facilities are fuller and would be justified in shutting off their interruptible (but not their firm) clients. Note that the price of natural gas has fallen from $13 to $8.40 and, from Robry's data, there has been no discernable effect on production volumes.

      There is a reason that oilfield trash have created the oilman's prayer.



    • Hey Hare:

      It is hard to get a good focus on hocus pocus support on $natgas but the way things are playing out 6 should not be ruled out. You have to go back two years. There should be somewhat of a bounce in here somewhere as it looks really sold out with the macd looking to poke its nose through. It would take serious sentiment I believe for a sustaine rally.

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