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Oil is up to $68/barrel...

N8 v2.0

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,003
149
The Cleft of Venus
Ok, I understand all the reasons why... (speculators mostly)..


But why the hell does natural gas track oil on the market? Most NG production is domestic so no threat of a disruption unless its a hurricane in the Gulf....

What gives?
 
J

JRB

Guest
Can you say bamboozled or hoodwinked???

I want to be on record saying that I voted for Kerry.
 
BurlyShirley

BurlyShirley

Rex Grossman Will Rise Again
Jul 4, 2002
19,180
17
TN
Just a guess, but do you think it could be due to the petroleum costs of producing natural gas? Shipping, extracting, etc? Kind of like airline tickets?
 
N8 v2.0

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,003
149
The Cleft of Venus
BurlyShirley said:
Just a guess, but do you think it could be due to the petroleum costs of producing natural gas? Shipping, extracting, etc? Kind of like airline tickets?
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Thought of that, but unlike oil, ng is almost all produced here in the US. However, historically, it tracks the oil market to a large extent.
 
J

JRB

Guest
N8 said:
Thought of that, but unlike oil, ng is almost all produced here in the US. However, historically, it tracks the oil market to a large extent.
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I think he is stating the costs of production and delivery.

I am sure that machinery service is a huge part of the expense.
 
DH biker

DH biker

Turbo Monkey
Dec 12, 2004
1,185
0
North East
Hey, Bush wants to drill in Alaska but the enviormentalist would rather pay $68 a barrel then get oil from our own country...


:)
 
BurlyShirley

BurlyShirley

Rex Grossman Will Rise Again
Jul 4, 2002
19,180
17
TN
DH biker said:
Hey, Bush wants to drill in Alaska but the enviormentalist would rather pay $68 a barrel then get oil from our own country...


:)
Click to expand...
Yeah, and he'd rather sell off the national forest to pay for rural schools instead of NOT giving $300 tax credits for unskilled workers who didnt earn them.

This is going to PD btw.
 
jimmydean

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
42,783
14,865
Portland, OR
I noticed gas prices in my area are up to $2.39 for regular. That is a $.60 increase in like 3 months.

I don't pay too much attention since I don't drive to work anymore. But holy crap that's expensive.
 
rooftest

rooftest

Monkey
Jul 10, 2005
611
0
OC, CA
The Brent spot (oil) is $67.88, the Henry Hub spot (nat. gas) is $7.06 currently. a few months ago, oil hit $70, while nat. gas was at $14 (we sold some for $17) They don't track as closely as you think.
 
DRB

DRB

unemployed bum
Oct 24, 2002
15,242
0
Watchin' you. Writing it all down.
Actually some of what you see just happens because the demand for both follows a similar curve. Its cold people want more. So in the winter they track closer then they do in the summer month... some of that is changing now however.

Over the past few years there has been an increase in demand for natural gas as more and more power generation is moving towards natural gas. Additionally the big hydro plants have had capacity cut somewhat by drier than normal conditions.

What this does is drive a year round demand for natural gas that in the past wasn't present. So price pressures are never relieved.

That being said natural gas supplies are running 60% above 5 year supply levels against short and medium term demand models. That normally would drop the price in the toilet. There is still alot of uncertainty in the market with the disruptions of Katrina fresh in folks minds. What's not fresh is that the disruptions really were minimal for natural gas.

All of that being said right now natural gas pricing is down (or even below) to where it was last year at the sametime. So it is definately not trending with oil right now. And that is because oil pricing is completely out of whack..... completely.
 
TtotheJ

TtotheJ

Monkey
Jan 23, 2005
215
0
B'ham, WA
jimmydean said:
I noticed gas prices in my area are up to $2.39 for regular. That is a $.60 increase in like 3 months.

I don't pay too much attention since I don't drive to work anymore. But holy crap that's expensive.
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$2.39! I wish I could pay $2.39 right now. When I came from work today I noticed gas at my local station was $2.85/gal. At this rate we'll be paying $4.00/gal by the time Memorial day hits.
 
L

luelling

Guest
I had read that heating oil prices sky rocketed becuase refiners were having to pump at full capacity on gas to keep up with demand and they weren't able to build as much of a reserve for the winter time....does natural gas have to be refined at the same refinerys? That could play into the price. I know that recent gas price rises are due in part to increased government taxation (I read it on cnn.com a couple of days ago) and not the rise in oil prices (they have been descently flat). I bet market uncertanty hI had read that heating oil prices sky rocketed because refiners were having to pump at full capacity on gas to keep up with demand and they weren't able to build as much of a reserve for the winter time....does natural gas have to be refined at the same refineries? That could play into the price. I know that recent gas price rises are due in part to increased government taxation (I read it on cnn.com a couple of days ago) and not the rise in oil prices (they have been decently flat). I bet market uncertainty has a lot to do with it as well.as a lot to do with it as well.
 
Westy

Westy

the teste
Nov 22, 2002
55,804
21,815
Sleazattle
DH biker said:
Hey, Bush wants to drill in Alaska but the enviormentalist would rather pay $68 a barrel then get oil from our own country...


:)
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They passed the bill allowing drilling in the Alaska Preserve. See gas prices go down? No. Want to know why? It is going to take 20 years to extract what is basically a few months worth of oil. In other words, drilling in the Alaska preserve will increase the worldwide oil supply by less than 1/2 of 1% over the next 20 years. The end result of drilling in Alaska is going to be the spoiling of some of the last pristine land in the US, the same gas prices and more profits for the oil companies. Hooray!
 
DRB

DRB

unemployed bum
Oct 24, 2002
15,242
0
Watchin' you. Writing it all down.
Westy said:
They passed the bill allowing drilling in the Alaska Preserve. See gas prices go down? No. Want to know why? It is going to take 20 years to extract what is basically a few months worth of oil. In other words, drilling in the Alaska preserve will increase the worldwide oil supply by less than 1/2 of 1% over the next 20 years. The end result of drilling in Alaska is going to be the spoiling of some of the last pristine land in the US, the same gas prices and more profits for the oil companies. Hooray!
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Oh Westy... don't buy the hype.
 
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