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Low Stockpile Raises Worries Over U.S. Natural Gas Supplies
Fox Business ^ | April 28, 2014 | Reuters

Posted on 04/29/2014 6:24:57 AM PDT by thackney

The United States faces a natural gas supply shortfall this year despite the country's fracking boom, threatening more price spikes as energy companies struggle to replenish stockpiles drained to critically low levels after a brutal winter.

As the coldest winter in 30 years thaws across North America, some experts worry that stockpiles will not be refilled to levels high enough to meet demand next winter, causing supply disruptions and sudden price surges of the kind that have dented power company earnings and raised residential bills in recent months.

The concerns center on a set of extraordinary circumstances: stocks are at 11-year lows; flat futures prices make it uneconomic for utilities to hold onto gas and burn it later, and a fractured network of pipelines means gas in big producing regions, including the country's biggest Marcellus Shale play centered in Pennsylvania, is stranded away from storage caverns.

Forecasts of a hotter-than-average summer have raised worries that higher demand could add further strain on stockpiles.

To be sure, utility companies still have months to restock and production is growing. In the long term, a number of pipelines scheduled to come online later this year will help ease some of the bottleneck around the Marcellus.

But as the country continues to pump out record amounts of oil and gas from a fracking revolution that took off toward the end of the last decade, some experts say the industry should be more aware of the possibility of a worst-case scenario.

"People are not taking it seriously. The market seems to have become complacent," said Anthony Yuen, natgas analyst at Citigroup in New York.

(Excerpt) Read more at foxbusiness.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: energy; naturalgas

Consider this the counter-viewpoint from yesterday's article about how Natural Gas prices are not rising.

Triple Storm For Natural Gas Fails To Break $5/Mcf
http://www.freerepublic.com/focus/f-news/3149631/posts

1 posted on 04/29/2014 6:24:57 AM PDT by thackney
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To: thackney

From this article:

But as the country continues to pump out record amounts of oil and gas from a fracking revolution that took off toward the end of the last decade, some experts say the industry should be more aware of the possibility of a worst-case scenario.

From Forbes in your link:

When prices dropped from over $10/Mcf in 2008 to under $2/Mcf in 2012 (wellhead average), howls of pain emitted from the Southwest as many drillers could not cover costs, even excluding those who overpaid for acreage. And drilling did, in fact, respond, with the number of gas directed rigs in the US falling to 300 from the high of 1500.

Who you trust?
The ‘invisible hand’ of the market or the nameless expert that MAY have an ax to grind?
Yes heavy industry is migrating (pushed) to natural gas.

NB: If you are anti LNG export this ‘news’ is for you!


2 posted on 04/29/2014 6:50:34 AM PDT by DUMBGRUNT
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To: thackney

Gee, we’ll just have to raise prices, won’t we? Gas producers have long complained about not being able to get prices back up to the 2008 levels. I think they found a strategy to now help them do that.

We has natural gas literally everywhere, but there’s always something wrong somewhere that requires a little manipulation to get the prices up.

Yeah, I’m cynical.


3 posted on 04/29/2014 6:53:05 AM PDT by Obadiah (I like Krabby Patties.)
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To: thackney

Just tap the politicians for more. They have plenty to spare and are spewing it out day and night. Hot air and political gas are a volital mixture and in over abundance in the District of Corruption.


4 posted on 04/29/2014 6:58:02 AM PDT by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: thackney

Just goes to show, it’s always something.

Might I suggest that it’s shortsighted to start with the speculative price-pumping chatter? We have a boom in natural gas, which has actually been more of a byproduct of hydraulic fracking. There is a nascent manufacturing renaissance ongoing due to the cost advantage of that natural gas. They’re going to kill it with this crap. Leave it alone.

Don’t get greedy.


5 posted on 04/29/2014 7:06:18 AM PDT by RegulatorCountry
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To: Obadiah

I never understood the logic that claims a business only needs an excuse to raise prices. It implies they can jack up prices when every they want, just need a plausible excuse.

If “they” could manipulate prices that easily, why would you believe they left prices lower in the first place?


6 posted on 04/29/2014 7:12:55 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

This has something to do with any shortages: “Nearly 15 million people in New England live within driving distance of America’s biggest natural-gas field, yet heating and electricity prices reached a record for the region this winter. “

http://www.freerepublic.com/focus/f-news/3149881/posts


7 posted on 04/29/2014 7:27:49 AM PDT by Balding_Eagle (Want to keep your doctor? Remove your Democrat Senator.)
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To: thackney
"and a fractured network of pipelines means gas in big producing regions, including the country's biggest Marcellus Shale play centered in Pennsylvania, is stranded away from storage caverns."

It sounds like they learned a lot from the L-P gas experiment last winter.

8 posted on 04/29/2014 7:32:59 AM PDT by Karl Spooner
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To: Balding_Eagle

Gas in the ground, that hasn’t been produced, processed or connected to pipelines has no impact at all on supply to a market. It has potential, but as our stable owner tells us about horses having potential, it means it isn’t worth a crap today.


9 posted on 04/29/2014 7:49:04 AM PDT by thackney (life is fragile, handle with prayer)
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