Peaked

The U.S. natural gas rig count has peaked and is now in the early weeks of a downward correction that is likely to extend through all of 2009 and perhaps most of 2010, an energy analyst said Wednesday.

Conventional natural gas production from the Western Canadian Sedimentary Basin (WCSB) basically has peaked, but the region’s unconventional gas holds as much if not more potential — if costs can be contained and prices are competitive, a Nexen Marketing USA Inc. executive told attendees at the annual LDC Forum Canada/Industrial Gas Users Association in Toronto.

Conventional natural gas production from the Western Canadian Sedimentary Basin (WCSB) basically has peaked, but the region’s unconventional gas holds as much if not more potential — if costs can be contained and prices are competitive, a Nexen Marketing USA Inc. executive told attendees at the annual LDC Forum Canada/Industrial Gas Users Association in Toronto.

Exploration and production (E&P) companies’ ability to find new oil and natural gas resources has peaked “at least in the short term” because new reserves are in ever-more challenging environments, and the industry is losing a generation of experienced workers, BP plc’s E&P chief said in speech at Rice University in Houston.

Exploration and production (E&P) companies’ ability to find new oil and natural gas resources has peaked “at least in the short term” because new reserves are in ever-more challenging environments, and the industry is losing a generation of experienced workers, BP plc’s E&P chief said in speech at Rice University in Houston.

Some Northeast citygates peaked above $9 and realized dollar-plus increases Friday amid gains at nearly all points in trading for the holiday weekend. That was hardly surprising with freezing weather due throughout Canada and most of the U.S. And for a change cash prices had prior-day screen support to set against the usual extra decline of industrial load during a long weekend.

Looking almost like a carbon copy of price action on Tuesday, December natural gas on Wednesday bottomed out at $11.510 and peaked at $11.930, before settling at $11.669, down 12.4 cents on the day.

While it’s possible that this week’s gas storage injection could end up being only 16 or 17 Bcf and that storage will fall short of a record level this year, it’s also quite possible that winter natural gas prices may already have reached their peak, according to energy consultant Stephen Smith of Natchez, MS-based Stephen Smith Energy Associates.

While it’s possible that this week’s gas storage injection could end up being only 16 or 17 Bcf and that storage will fall short of a record level this year, it’s also quite possible that winter natural gas prices may already have reached their peak, according to energy consultant Stephen Smith of Natchez, MS-based Stephen Smith Energy Associates.