just another Ponzi scheme
they are pumping NG like there is no tomorrow. things are about to get a lot worse from here
the NG industry is hugely in debt an losing billions every quarter. We've seen few bankruptcies this year but i think during the next 3 to 6 months things will get a lot worse
Speculators cut bearish bets on natural gas to a six-month low after late-breaking summer heat stoked demand for the power-plant fuel and as shale supplies start to slide.
Money managers reduced short-only gas contracts 3.5 percent to the lowest level since March while long wagers rose 2.7 percent in the week ended Sept. 15, U.S. Commodity Futures Trading Commission data show. Their net-short position in four gas contracts shrunk by 34 percent.
Energy drillers are idling so many rigs in response to low energy prices that gas supplies may fall short of demand next year, Bank of America Corp. and Citigroup Inc. said this week. Production is set to decline in October for the fourth straight month, a record slump in government data going back to 2007.
“What you are seeing now is people a bit worried about natural gas production volumes,” Nicholas Potter, an analyst with Barclays Plc in New York, said in a telephone interview Friday. “If people want to make a bullish argument as we head into 2016, they could point right now to production levels.”
Gas futures rose 0.7 percent to $2.728 per million British thermal units on the New York Mercantile Exchange in the period covered by the CFTC report. Prices briefly jumped to a one-month intraday high of $2.794 on Tuesday before ending the week at $2.605, the lowest settlement since June 5.
As much as 400,000 barrels a day of oil production is at risk as U.S. shale companies like Samson Resources Co. run out of money and are forced to slow drilling.
Total debt for half of the companies in a Bloomberg index of more than 60 producers has risen to a level that represents 40 percent of their enterprise value. It’s a sign of distress that shows equity values falling in the face of oil’s crash, said Rob Thummel, a managing director and portfolio manager at Tortoise Capital Advisors LLC who helps manage $15.6 billion.
The companies facing high debt loads, which include Encana Corp. and Chesapeake Energy Corp., produced 1.1 million barrels of oil a day in the second quarter of this year, according to data compiled by Bloomberg. If more companies file for bankruptcy as Samson did Wednesday, or embrace the kinds of draconian cuts needed to survive, output could fall by 200,000 to 400,000 barrels, Thummel said. That’s about the amount of oil from Oklahoma, the sixth-largest producing state, which pumped 356,000 barrels a day in June, government data show.
“We are going to see a major response because these financially challenged companies won’t be able to produce as much as they did in the past,” he said.
As companies run low on cash, they may be forced to idle drilling rigs, confront bankruptcy or seek more-expensive financing and sell assets.
right now production is at 71.9....so for now, trading is the only way to go
personally, I don't think so.
and that is EVERY SINGLE ONE. this will probably be the worst quarter ever. Time for few more bankruptcies.
this is the 5th down day in a row. I'm thinking there will be a bounce soon, probably all the way to $2.7
this Ponzi scheme will end just like all the other Ponzi schemes
the cure to low prices is low prices. let it drop below $2 if you want to see $6
I think the EIA people are nothing but a bunch of clowns that need to go back to school to learn how to add. That aside, they are definitely helping putting an end to the NG Ponzi scheme...and for that I'm grateful