North American Natural Gas production surged this week according to data from Robry825, a widely quoted and published natural gas analyst. This bodes very poorly for gas prices going forward although it is offset by improvements in demand and the recent cold weather.
Production increased by at least 20 BCF this week taking weekly production back to 540 BCF for the week. While rig counts and production have been rising since September of last year really surged this week (up 4%) and is now 2/3 of the way back towards the highs of last January in spite of gas prices which have ranged from $2 to $6 over the period in question. While industrial demand has also increased substantially since the financial crisis induced lows of last winter, this kind of production increase is not bullish for prices and may serve to cap natural gas prices below $6 for quite some time.
There is a great chart of the surge in production at SaintSinnerIdiot's Blog. www.saintsinneridiot.blogspot.com
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