Saturated

A “well saturated” market and sustained drilling led Bank of America Merrill Lynch (BofA) last week to join other energy analysts in cutting the price forecast for U.S. natural gas in 2011.

A “well saturated” market and sustained drilling led Bank of America Merrill Lynch (BofA) to join other energy analysts in cutting the price forecast for U.S. natural gas in 2011.

Western North America has overreacted to price signals and taken “drill, baby, drill” to an extreme, and as a result the region is saturated with natural gas production that outstrips the current prospective markets, according to a panel of western energy executives who spoke last Tuesday at the 2008 LDC Forum Rockies & West Conference in Irvine, CA. Current swift drops in wholesale gas prices will help, but volatility still adds continued uncertainty for buyers, the panelists said.

Western North America has overreacted to price signals and taken “drill, baby, drill” to an extreme, and as a result the region is saturated with natural gas production that outstrips the current prospective markets, according to a panel of western energy executives speaking Tuesday at the 2008 LDC Forum Rockies & West Conference in Irvine, CA. Current swift drops in wholesale gas prices will help, but volatility still adds continued uncertainty for buyers, the panelists said.

The saturated power market and significant downsizing and belt tightening among merchant energy companies will result in a sharp decline in the number of gas-fired power plants added to the market over the rest of the decade. “The construction boom is finally nearing its end,” Virginia-based consulting firm Energy and Environmental Analysis Inc. (EEA) said in its latest Monthly Gas Update.

The saturated power market and significant downsizing and belt tightening among merchant energy companies will result in a sharp decline in the number of gas-fired power plants added to the market over the rest of the decade. “The construction boom is finally nearing its end,” Virginia-based consulting firm Energy and Environmental Analysis Inc. (EEA) said in its latest Monthly Gas Update.

After a year of 6% gas production growth in 2001, Canadian gas production growth in January and February is beginning to slow down. Canadians may be unable to make significant gains without another Ladyfern-type find, said Lehman Brothers analyst Thomas Driscoll.

After a year of 6% gas production growth in 2001, Canadian gas production growth in January and February is beginning to slow down. Canadians may be unable to make significant gains without another Ladyfern-type find, said Lehman Brothers analyst Thomas Driscoll.

A deep-drilling exploration project in the southwest end of theoil/gas saturated San Joaquin Valley about 45 miles northwest ofBakersfield is moving into the production testing phase with itssponsors, Tri-Valley Oil and Gas, liking what they have seen inpreliminary analyses of the 19,100-foot-deep Project Ekho#1 testwell.