Category Archives: Natural Gas

The second stock in which we hope to add to the Independent Stock Analysis Portfolio is Cabot Oil & Gas. Cabot (COG) has 100% of it’s production as natural gas and is the lowest cost producer in the lowest cost basin. The combination of…

More evidence the economic recovery is real by Tim Duy . Temp Staffing and Employment and Housing at Value Plays . Tax receipts are strong ( Dr. Ed ). The $85 billion a month in printing looks to continue indefinitely at Marketwatch . S&P…

Economy Shows Surprising Bounce: “Early-Year Progress Faces Headwinds, Though, as Washington Drama Still Spooks Many Businesses” Google the title at the WSJ . The case for optimism by Scott Grannis . “That figure was up from the low…

Will the Cyprus surprise be akin the Bear Stearns collapse five years ago? Good morning. All markets are down this morning except natural gas and gold. The natty price functions in it’s own insulated world apart from the madness of risk on…

WTI Oil Trades Near Four-Month High on Seaway Pipeline Expansion at Bloomberg . Oil Takes Out Key Resistance at Bespoke . Historical oil prices: EIA . Well, yes: “Despite record-high oil sector investments, Norway’s crude oil output fell…

October US natural gas production was an all-time high: EIA . Exporting the American Renaissance: Global Impacts of LNG Exports from the United States by Deloitte . “Saudi Arabia, the world’s largest oil exporter, reduced its crude…

Futures are higher as China Exports Accelerate With Credit in Recovery Boost: Economy ( Bloomberg ). A re-acceleration of Chinese growth is what everyone has been waiting for… Investment risks and cycles by Howard Marks . We remain…

Understanding the Oil Cycle at Investing Daily . “RBC Capital Markets’ commodities expert, George Gero, sees WTI trading in a $20-band around the mid-$80s in 2013…” Saudi Gazette “U.S. daily oil production, which averaged 6.4 million…

The energy piece of the economic puzzle has morphed over the last several years. From a macro economic perspective, energy does not appear to be a headwind. Energy is providing a sustainable economic competitive advantage in the U.S…

Oil Market Going Through ‘Violent’ Structural Change: IEA at CNBC : “…the shift of oil demand from the West to the East is now rapidly accelerating” and “refining margins have become more volatile.” Iraq, Saudi on OPEC collision course…

S&P 500 Energy & Materials relative to each other by Ed Yardeni . The Significant Impact of U.S. Oil Production by Frank Holmes . Three charts of America’s bright energy future by Mark Perry . The Insourcing Boom ( The Atlantic ) helps…

Oil as an Exhaustible Resource by James Hamilton , which dovetails with the ISA idea worldwide oil production is on an undulating plateau, the shape of which will be determined by price. 9 Charts That Show Why People Have Begun To Whisper…

In NG Calls a reader asked some good questions. My cleaned up response: So you think that natural gas plants will continue to replace old outmoded coal plants? Yes, the coming wave of stateside coal plant retirements is well documented…

I trust members used the weekend to get caught up on the heavy reading presented at Independent Stock Analysis . In honor of cyber Monday, consider subscribing for $100 a year. Now we’re back at it as we continue to examine our thesis…

Today the investor can waste time watching ‘business news’ being reported from the mall, or you can spend 15 minutes with Independent Stock Analysis: NatGas Inventories Begin Falling Fast, Cold Snap May Send Prices Surging Above $4 Fast at…

The possibility of a Santa Claus rally: Cam Hui . “There are a number of possible Utica deals on the horizon, with some values potentially rivaling the approximate $15,000 per acre that Chesapeake previously announced.” Wow! UG Center…

EOG Resources reported stellar oil production results and growth again in the third quarter. EOG is an outstanding company; unfortunately shares are priced richly. Chief Mark Papa always provides clear macro commentary and was the first to…

Crude Futures Drop on Greek Austerity Vote, Rising U.S. Supply at Bloomberg . Energy chart of the day: US oil output during last week of October was highest weekly production since January 1995 from Mark Perry . U.S. net petroleum imports…

For the past several years natural gas market participants have noted that seemingly every independent producer consistently trumpeted its robust growth. The market was oversupplied for several year prior to last year’s winter going MIA…

Oil Trades Near Four-Month Low on Greece Concern, U.S. Elections at Bloomberg . Surging Oil Production In US And Iraq Weigh On Long-Term Oil Prices, Demand Is Key In Near Term at HAI . Last decade a leg of the fundamental negative outlook…

Thursday magnified the importance of stock selection in the E&P sector. SM rose 11% and BRY fell 12% on results. Execution is the prime reason PXP is able to make its huge foray into the Gulf of Mexico while FST attempt to turn around and…

Oil Trades Near 3-Day High as Refineries Resume at Bloomberg . Sandy likely will lead to lower gasoline prices at Fuel Fix . Analysis: Does U.S. shale mean cheap global oil by 2020? at Reuters . ISA continues to think remarkably steady oil…

Oil Trims Biggest Monthly Decline Since May After Storm at Bloomberg . Will The Crude Production Boom Keep Running? RBN Energy Regarding Sandy, “Bakken fell $6.50 to a $10-a-barrel-discount against WTI at 3:12 p.m. New York time, its…

Pop quiz: When does $3.47 minus 3 cents equal $3.77? Answer: When futures contracts rolls over. The November NG contract expired and December is now the front month. Most E&P’s have very modest hedges in place through 2012 while being…

Oil Slides, Gasoline Gains as Hurricane Sandy Nears U.S. at Bloomberg . Energy chart of the day: Shale oil production in North Dakota and Texas has boosted US oil production to a 17-year high by Mark Perry . Off topic: North Dakota’s oil…

Will the market weakness remain contained or is it the start of something deeper? Chess One wildly bullish cycles commentator is calling for a bottom: Toby Connor . Meanwhile, futures are strong this morning as Oil Rebounds After Five-Day…

Independent Stock Analysis has long suggested world oil production oil appears to be on an undulating plateau , the shape of which will be determined by price. And the oil price may be remarkably steady for the years ahead. OPEC and the…

Oil Falls for Fourth Day in New York; Brent Fluctuates at Bloomberg . Yesterday was Natural Gas’ Biggest Single-Day Slump Since August at Barron’s . Dennis Gartman Makes the Bear Case for Crude on CNBC . “U.S. fossil fuel production will…

Oil Advances; Keystone Pipeline Set to Start at Bloomberg . Goldman sounds like the ISA ‘stable undulating plateau oil price regime’ ( Reuters ): “Over the past three years long-dated Brent crude oil prices have shown signs of stabilizing…

Yesterday, Gas Slides on Forecasts for Above-Normal Temperatures at Bloomberg . Perhaps a slow start to winter provides an entry point for the gassers… The service company’s loss is the E&P’s gain: “Pricing for shale work is expected to…

Morgan Stanley’s bullish natural gas note last week may well be significantly understated with the assumptions used in my opinion. The full report: Morgan Stanley . Natural gas and coal: Energy Energized by Ryan Puplava . Economists are a…

Walden Pond: “Do not hire a man who does your work for money, but him who does it for love of it.” Consider your Independent Stock Analysis membership today! Meanwhile, coal bulls and bears alike are a cocky bunch: Coal Today VS. Two Weeks…

The coal stocks ripped higher yesterday. Perhaps speculators were betting a Vice-President candidate was going to announce “I love coal”, as did a candidate at the top of a ticket. Natural gas was very strong on an inventory number…

Daily Energy Price Outlook at Curve Ahead . The super-majors can’t really increase production, they just increase production on a per share basis with continual share buybacks. Chevron warned. Costs balloon on Norway projects ( Upstream…

Independent Stock Analysis readers know JJ Butler was promoted from piker in the rebound from the telecom bust in 2003. Teck Resources (TCK) was an even better score as a high quality company pigeon holed with outstanding long term assets…

Oil Declines From High as Crude Stocks Seen Rising at Bloomberg . Continental’s five year plan announced yesterday was in conjunction with the company’s Investor Day . A summery at Million Dollar Way . Report: Shale gas boom could echo…

Oil Heads for Third Weekly Drop Before U.S. Jobs Data at Bloomberg . U.S. crude oil output reaches a 15-year high in September; Dept. of Energy predicts significant increases to continue ( Mark Perry ). “The rapidly growing crude-oil flow…

Oil Trades Near One-Week High as U.S. Manufacturing Expands at Bloomberg . America’s booming energy industry has emerged as the no. 1 job-creating sector of the U.S. economy by Mark Perry . The horizontal drilling boom being bullish for…

Stock futures are higher this morning, while Oil Declines From One-Week High as China Manufacturing Weakens at Bloomberg . The oil price hinges on economic growth: Saudi Gazette . Maugheri vs The Oil Drum: Cornucopians vs The Peak Oil…

Don’t look now, but near front month (November) natural gas is trading at $3.29, while December contracts are at $3.58. Coal became depressed on the back of the shale gas boom: Haynesville Play . Coal vs. natural gas: It’s complicated at…

High storage masking ‘fundamentally balanced’ US natural gas market: FBR at Platts : “ The record amount of US natural gas in storage is masking a “fundamentally balanced” gas market this year and one that will be under-supplied in 2013…

Oil Rises in New York on Speculation Last Week’s Drop Overdone at Bloomberg . Oil spare productive capacity trumps: “…analysts are increasingly skeptical about whether these countries have the capacity to shield Western consumers against a…

Yesterday’s unofficial announcement money printing has become permanent boosted asset prices. Western world stimulus affects the precious metals complex most. The second beneficiary is oil. Materials are driven by Chinese and emerging…

For the third straight day the coal names have rallied. Interestingly, only those with a position would have noticed. Share owners have had relief and shorts have been squeezed hard. I continue to wait on coal. The rally from deeply…

Oil Trades Near One-Week Low as U.S. Manufacturing Contracts at Bloomberg . 2012 US Oil Production Will Be Highest In 14 Years & US Oil Boom Gets Bigger ( John Hanger via EIA). Saudi Arabia may become oil importer by 2030: Citigroup at…

Oil Rises to Highest in One Week on Stimulus Speculation at Bloomberg . Did you know Gasoline Costs In 2011 Hit Record Average of $2,850 ? ( John Hanger ). No wonder Lessons from the 2011 oil release are discussed ( Financial Post ). U.S…

WLT, ANR, ACI are all one bad day away from fresh lows. BTU and CNX have held up better yet are still weak. The best names, CLD and ARLP, would not be spared in a sector wipe-out. Second quarter conference calls had management commentary’s…

If Moody’s is correct , then natural gas is headed much higher after the shoulder season: Switch From Coal-to-Gas Looks Permanent, Says Moody’s ( CIN ) and Most Coal-to-Gas Switching in U.S. Permanent, Moody’s Says ( Bloomberg ). The price…

Oil Rises on U.S. Supply Forecast, Venezuela Blaze at Bloomberg . Isaac Set to Reach Hurricane Strength on Way to Louisiana ( Bloomberg ). More than three-fourths of Gulf oil production shut down at Fuel Fix . Isaac’s latest path at…

A fourteen page natural gas storage chartfest from BMO and Investor Village . The hottest July ever helped burn excessive inventory: Haynesville Play . One natural gas tea leaf, from Investor Village : Nat Gas Production Data – Production…

A sustained rise in natural gas is required for the coal sector to rebound. Perversely, Natural gas futures tumble 4% after U.S. supply data this morning ( FP ) is healthy. A strong cyclical US coal upswing needs natural gas production to…

Oil Advances to 3-Month High Before Europe Debt Meetings at Bloomberg . Demand destruction stunner: “Oil consumption in July 2012 was 18.062 barrels per day–matching July 1995 levels.” John Hanger With 2011 Permian oil production of…

The super-cycle is still soft as BHP warns of job cuts in coal as China cools in Mining Weekly . However, mine curtailments and capex cuts are the fertile ground of bull markets. Peabody Energy says it is continuing to evaluate spending in…

Oil Rises as European Leaders Prep for Debt Talks at Bloomberg . The last headline I expected to see upon returning from holiday : U.S., U.K. to Call for Strategic Petroleum Reserve Release? Iacono Research . Dennis Gartman: Tapping SPR…

Coal shares down on lower steel coal price talk at Reuters . ISA readers already know coking coal is not the play right now. “Coal used to make steel is set to drop to the lowest price in two years” at Bloomberg . Walter Energy Shares…

Oil Rises for First Time in 3 Days on Likely Supply Drop at Bloomberg . Does the World Need Iran’s Oil? Apparently Not at Business Week . Meanwhile, US demand continues to be tepid at the EIA . One indication oil supply is hard pressed to…

This weekend everyone was excited over the coal stocks. The charts finally turned and started to improve: ACI , CLD and a chart-fest at FINVIZ . Got Coal? When “Less Bad” Starts To Work at Upsidetrader garnered a lot of attention. I was…

Oil Gains Amid Concern Mideast Tensions May Curb Supply at Bloomberg . Seems everyone is calling for volatile oil prices. Do not be so sure. Protecting oil prices from going meaningfully lower are OPEC, the high cost of new supply and…

In spite of the current depressed conditions, coal is here to stay (excellent read by Robert Bryce ). The thesis here at Independent Stock Analysis consists of a booming US thermal market when natural gas production finally declines…

Oil Pares Weekly Gain as China, IEA Signal Slower Growth at Bloomberg . This is the chief reason oil is lower this morning: IEA sees oil demand growth slowing further in 2013 at Reuters . OPEC sees downside risk to 2013 oil demand outlook…

James River (JRCC) reported this morning. The Q2 EBITDA being less than two times interest expense is scary. Throw on capex and they are burning cash. Fortunately, they do have strong liquidity with their next debt maturity not due until…

Oil Drops From Two-Month High in New York as U.S. Demand Eases at Bloomberg . I do not know the source, but “Active rigs in North Dakota: 198. Down from the boom’s high of 218.” at Million Dollar Way . Despite the US shale boom, why is…

The most important catalyst for a return of the coal sector is a normalization of the natural gas oversupply. Aubrey this morning on CHK’s conference call : “Chesapeake’s projected 7% downward trend in gas production for 2013 will likely…

Oil Near Two-Week High on U.S. Supplies; Brent Rises Above $110 at Bloomberg . “But Helms emphasized that oil production in the Bakken is consistently increasing by 15,000 to 20,000 b/d every month, and that thousands of additional wells…

Listening to the coal company management teams on their conference calls broach’s the surreal. The observer is left to figure out by himself the industry is depressed. Hope springs eternal with happy talk. Three things have kept natural…

Continue to watch natural gas. “US Lower 48 production at 72.39 Bcf/d essentially unchanged in May from 72.38 Bcf/d output in April” ( EIA ). The worm will turn, but have much patience. In the hot 2010 summer about 12% of total U.S…

Today brought coal stock upgrades and a 6% rally in natural gas, yet the coal stocks are weak after Friday’s barn buster rally. While pondering the action, let’s consider more fundamentals: Most important for coal is natural gas. Coal…

Oil Trades Near Week High on Stimulus Outlook, Mideast Unrest at Bloomberg . U.S. crude oil production (ex-Alaska) reaches a 23-year high in June : AEI . The industrial side of the shale boom: Reuters . “Continental Resources Inc.’s daily…

Despite yesterday’s EIA oil report showing an increase in inventory, the price reversed higher. Bloomberg New oil sands development requires a very high oil price: Financial Post . “A new study says North Dakota’s oil production could jump…

The coal stocks continue to trade like grim death. Most of the names are making fresh lows and I do not own any at the moment. Twice in the past I have been deeply involved with stocks trading below one year of cash flow and some of these…

Oil Trades Below $90 a Barrel a Third Day on Supply Gain at Bloomberg . US, Europe face distillates shortages heading into winter: BofA Merrill Lynch at Platts . Also, gasoline stocks are at the low of their five year range, though crude…

Peabody Energy gave their outlook and reported their second quarter results . Peabody Energy Q2’12 earnings ahead of Street, but 2012 sales view lower at SNL . BTU shares are down 10% on poor guidance from their Australian business for a…

Oil Advances From One-Week Low on Chinese Manufacturing Outlook at Bloomberg . Oil-Price Surge Is All About Iran from the WSJ . Blackrock: US Shale Boom: A Case of (Temporary) Indigestion at Scribd . Eagle Ford crude pricing: RBN Energy…

Cooling related power demand remains strong ( Bentek ). So natural gas is higher on a tough market day, dragging the coal sector to near flat. US utilities may return to coal as natgas prices rise at Mining Weekly . Peabody reports second…

Holy crap! Nexon agrees to $15.1B takeover by Cnooc . Marketwatch The Chinese are coming! The American Shale Conundrum Facing China’s Energy Champions at WSJ (google the title to read the whole article). Oil Plunges to Four-Day Low as…

Coal rebounding is dependent upon natural gas pricing. As you already know, I think the the key component is the natural gas rig count. This week the rig count fell by 4 to 518 ( Bloomberg ). Baker Hughes sees a fall to 488 by year end (…

Oil Drops From Nine-Week High on Signs Demand May Weaken at Bloomberg . Oil prices will have a lot to say about how quickly U.S. unconventional production surpasses OPEC’s second and third largest producers: Petroleum Economist . The…

Oil Rises for a Seventh Day on U.S. Gasoline Stockpiles at Bloomberg . The WTI:Bakken differential has collapsed: Bloomberg . Risk to the Brent:WTI spread? Financial Post North America Average Annual Crude Oil Production 1980 – 2012 at…

Yesterday saw a large swath of the oilers gain strength as the day progressed. The larger the trading volume in the name, the stronger the stock. Oil Drops From Seven-Week High on Outlook for Economy at Bloomberg . As China imports have…

Crude Trades Near Seven-Week High on Iran Tensions, Stimulus Speculation at Bloomberg . Fragile, but Comfortable, Oil Market Expected at Oil Price . Chinese crude imports at nine-month low at CGES . What happens to price if and when…

With a recovery in the coal complex dependent upon some kind of natural gas normalization, note natural gas is in oversupply in two ways: Storage and Supply. First, natural gas in storage is off the charts per the EIA . The low natural gas…

Oil is $1.25 higher as I type: Bloomberg . Commentary on oil decline rate assumptions, which points to world oil production being on an undulating plateau: ODAC-Info with a hat tip to Pedriven at Investor Village . Leading peak oil…

Yesterday WTI crude oil was higher by $1.25 on the potential Statoil strike, yet Canadian pipeline crude differentials rose more than $2 at Platts . This morning Crude Drops as Norway Ends Oil Strike, China Cuts Imports ( Bloomberg ). When…

Oil Rebounds as Norway Strike Looms at Bloomberg . Statoil Prepares to Shut Down Production As Strike Continues at the WSJ . “Problem is, the rebound last year was fuelled at least in part by an average deficit of 800,000 barrels a day for…

Bank of England tacks on $78 billion to their printing program ( Marketwatch ). ECB cuts more rates than expected ( Marketwatch ). But China steals the show with a cuts ( Marketwatch ). One more take: FT Alphaville . Looks like the…

Oil Rebounds in New York on Global Stimulus Speculation , Iran at Bloomberg . The especially weak ISM manufacturing data yesterday was bullish, in a perverse way, because of a pavlovian market participant response to central bank easiness…

Brent – WTI curves are not converging any time soon at Sober Look . OPEC warns EU low oil prices threaten future supply security at Platts . “Venezuela is aiming for “an average price of $100 a barrel.”” at Business Week . Geo-politics are…

Simply said, $70 would cause a slew of problems for oil producers. Don’t look now but unless it is being priced of against waterborne oil, we are there. Economics get very skinny and capital budgets outspend cashflow with low oil prices…

Hello Brent contango at FT Alphaville . “…the U.S. will drastically reduce its reliance on important oil, in particular from the Middle East…China’s story is precisely the opposite.” WSJ Details on yesterday’s petroleum inventories: Hard…

Yesterday a report by Leonardo Maugeri created big buzz in the oil and gas community. The Oil and Gas Journal actually used the ridiculous 17 million number in a headline. The executive summery forgets about price . The WSJ and economist…

Oil Trades Little Changed as Storm Threat to U.S. Gulf Crude Supply Fades at Bloomberg . Annual Energy Outlook 2012 (Only 252 pages long): EIA This would only be the tip of the iceberg: Oil price fall slowing oilfield activity at Calgary…

We arrive at our desks to weak prices, even with Almost 23% Of Gulf Of Mexico’s Oil-And-Gas Output Cut By Storm : IB Times . Natty will remain depressed withdrawal season begins next fall, while oil needs help from the a ‘Saudi Arabia…

Energy investors have one final straw to possibly grasp: Brent oil spent the previous fourteen months over $100; the 200 day moving average is $112. Brent now having a $91 handle wouldn’t feel so good. Perhaps the Saudi’s will cut…

Peter Brandt touched off a conversation with his “Generational Bottom” post this morning on natural gas. So, what is the financial instrument to play it? UNG? With the negative roll, I’ve never seen a crappier product. Futures? Premiums…

The central bankers seem to be in charge. Oil Gains a Second Day on Stimulus Speculation, OPEC Output Call at Bloomberg . Oil and price incentives: Econbrowser . A conservative take on the Bakken: NDDMR . Apache goes big on horizontal…

Expect the Bakken boys to report stellar Q2 numbers: “April…was the largest year-over-year increase in the state’s history at 73.5%…) via Mark Perry . Also, The Bakken Buck Starts Here – Bakken Crude Pricing – Part II at RBN Energy . Lower…

OPEC maintained quotas yesterday. “The U.S. shale boom is starting to sap demand from their most important customer. OPEC members are also consuming more of their own product, leaving less to export…The euro zone accounts for a mere 12 per…

Futures are higher this morning, one take: Reformed Broker . Raymond James Energy Stat of the Week pertains to thermal coal: Raymond James . Coal export perspective from the EIA . Oil Gains Most in Five Months on Spain Bailout, China at…

If given the opportunity to export, U.S. E&P’s would destroy LNG pricing in short order. Natural gas reserves in the Economist . Long term chart of market capitalization as a percent of GDP: Ritholtz . Valuations, corrections and bear…

The Bakken Buck Stops Here-Bakken Crude Pricing-Part 1: RBN Energy Enbridge faces Bakken complaints: Globe and Mail Multi decade oil inflation-adjusted at Chart of the Day . Saudi Arabia Achieving $100 Oil Signals Output Reversal at…

Eagle Ford human interest article: Fuel Fix As production ramps higher in a new play, operators get behind before a maintenance level of backlog inventory is found. The Eagle Ford backlog at Eagle Ford Shale . Crude oil and refined product…

Newfield (NFX) CEO Lee Boothby spoke for 40 minutes this morning at the the Citi Global Energy Conference. Q1 2012 oil production was 47% of total production and I estimate using the back of an envelope should be near to mid-fifties by…

Shale of the Century at the Economist . Price matters, as natural gas displaces coal at the EIA . Capital Destruction in Natural Gas by Testosterone Pit . The IEA put out a natural gas report: Global Natural Gas Demand to Rise Sharply at…

Crude glut, price plunge put oil sands projects at risk at The Globe and Mail . Monthly U.S. imports: EIA “Since 2005 the global capacity of installed wind power has quadrupled, due to a variety of factors such as improved technology…

Raymond James Energy Stat of the Week: Is Brazil really on track to double oil production by 2020? Raymond James Pipelines to Profits at Barrons . (Google the title to be able to read the full story.) With bond prices so high, MLP’s are…

Fuel switching from depressed natural gas prices has coal inventories high. EIA Meanwhile, the beaten down coal stocks have held up in today’s shellacking. 24/7 Wall Street In this commodity super-cycle, every time Chinese imports have…

Raymond James Energy Stat of the Week: Don’t expect supply to be a team player. Raymond James Natural Gas Head Fake? Can the 44% price run-up be sustained? RBN Energy That 44% run-up put in perspective in the chart at the top of this…

Conference call notes: Thrice they were asked how much was drawn on the revolver as of Friday. Answer 1: Referenced March 31 and and $3 billion less than Friday. Answer 2: Don’t recall, but $3 billion less than Friday (flippantly) Answer…

Natural Gas Vehicles: Raymond James Energy Stat of the Week Missing from the Export Land Model is the new booming US oil production growth. Saudi Arabia and solar power? Peak Oil Economist Mark J. Perry posts on oil: 1) Peak What? 2) Green…

Over the last three weeks blog postings here at Independent Stock Analysis have been coming at a rate of two or more every market day, plus one on Saturday. I am taking off Mother’s Day weekend for family time and a road race. Be sure to…

Last decade investors were concerned about the industry’s ability to produce oil and gas. Natural gas conventionally produced was on a treadmill running too fast and producers could not keep up, forcing the price ever higher. Natural gas…