A Tudor, Pickering, Holt & Co. (TPH) analyst last week cut the 2010 average natural gas price forecast to $6.20/Mcf, down from an earlier forecast of $7.50, because of the faster-than-expected pickup in domestic onshore drilling. That news was followed Wednesday by an IHS Cambridge Energy Research Associates (CERA) analyst, who predicted Henry Hub gas may fall below $4/Mcf by the end of this year.
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All signs point to higher natural gas prices in early 2010, the energy team at Tudor, Pickering, Holt & Co. Securities Inc. (TPH) said Tuesday. According to TPH models, the plunge in drilling activity from the peak in 3Q2008 should result in wellhead supply declining by 5 Bcf/d, or 8%, at the end of 2009 from year-end 2008.
If the U.S. natural gas rig count this year remains at around 700 and Canada has about 50 gas rigs running, North American gas production by early 2010 “will be 10% lower and headed south pretty quickly,” Chesapeake Energy Corp. CEO Aubrey McClendon said Tuesday.