Insight

Producers that ply shale gas plays could someday benefit from increased insight into shale reservoirs courtesy of researchers at the University of Oklahoma (OU).

A rising tide of liquefied natural gas (LNG) will lift deliveries to terminals in Europe and the United States this year, and traders seeking insight into which side of the Atlantic Basin will get the bulk of the LNG spillover should watch oil prices, according to analysts at Merrill Lynch.

A rising tide of liquefied natural gas (LNG) will lift deliveries to terminals in Europe and the United States this year, and traders seeking insight into which side of the Atlantic Basin will get the bulk of the LNG spillover should watch oil prices, according to analysts at Merrill Lynch.

S&P Equity Research, using data from Global Insight, announced Friday it is lowering its 2005 Henry Hub bid week (blend of spot and contract) price projection by $0.16 to $8.19/MMBtu, and 2006’s by $0.06 to $9.47/MMBtu. The group is projecting a December bidweek price of $12.27/MMBtu and a five-month winter average approaching $13/MMBtu. The projections are subject to weather and the return of Gulf of Mexico supplies, analyst Tina Vital, an oil and gas analyst with Standard & Poor’s Equity Research, said. “While warm weather and bearish storage reports have pushed U.S. natural gas prices down to near $11 per million Btu, we believe these declines are temporary. With eastern U.S. winter weather expected to be colder than normal, we expect above-average storage withdrawals and Gulf production losses will boost Henry Hub bid week prices” with a peak price of $12.71/MMBtu in January.

Storage levels may be continuing to rise with this warm November weather, but Global Insight consultant Jim Osten warned that Northeast consumers should still expect to see $15/MMBtu wholesale gas prices at the citygate for January bidweek.

Like a bouncing ball, natural gas futures continued to chopsideways yesterday as scale down buyers took advantage of lowprices afforded them by the market’s dip Wednesday. The Augustcontract finished up 3.3 cents at $2.179, and in doing so continuedits five-day streak of alternating advances and losses.