Sunday Jan 28, 2012
As we said a week ago, when everyone is absolutely certiain price can only go lower, when it looks like there is no way to stem the over supply, well something happens that proves eveyrone wrong. In this case it is the price of natural or shale gas.
First CHK anounced it was cutting back its drilling program for nat gas, drastically.
Second, now today, our own brain trust at the Fed Govt estimates the Marcellus shale is really 60% less
than everyone thought! Well there you go.
In the early 1970s I worked for the City of Austin. The City owns the electric generating facility. One of the prominenet execs there casually remarked over lunch one day that Texas would completely run out of natural gas in a few years, there simply would not be any more to find. I asked and prodded, but he was firm on his conviction.
So, who knows how much is down there? Here is amnother puzzle piece in concluding that a low in nat gas prices have finally occurred.
Meanwhile Iran took the EU up on its double dog dare, if EU is embargoing Iranian oil, well by golly
Iran just won't sell the EU any oil. Considering there is no oil in Europe, other than the North Sea, this should be supportive for higher oil prices, another one of our expectations.
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