Natural gas futures rose Monday, climbing for the fourth straight session, as traders bet that a powerful winter storm moving toward the East Coast, along with a recent cold spell, would boost demand for the heating fuel.
Natural gas for December delivery fell 5.1 cents to settle at $3.566 per million British thermal units in New York yesterday, breaking a six-day streak of gains, after prices on Tuesday rose to $3.617, the highest closing price since Oct.30.
Natural gas futures dropped from a two-week high in New York amid speculation that a government report tomorrow will show a U.S. inventory gain that’s above average for this time of year.
Gas slid 1.4 percent as the Energy Information Administration may say stockpiles expanded by 22 billion cubic feet last week, based on the median of 18 analyst estimates compiled by Bloomberg. Estimates ranged from gains of 2 billion to 33 billion. The five-year average injection for the week is 19 billion. Supplies fell 12 billion a year earlier.
The story of U.S. natural gas gets referenced a lot but you may not know whats going on. Here are 15 charts that tell the story of the U.S. natural gas market which has been completely changed by the rise of horizontal drilling and hydraulic fracturing.
In the past few years, new technologies and cheaper costs allowed producers to access gas trapped in parts of the U.S. previously considered unreachable.
Denatured ethanol for November delivery fell 1.2 cents, or 0.7 percent, to $1.675 a gallon on the Chicago Board of Trade after touching $1.668, the lowest price since July 2010. Futures have dropped 24 percent this year.
Technology allowing companies to retrieve oil from shale-rock formations has led to abundant, cheap supplies. And the availability of inexpensive oil has enabled refineries to increase their production of gasoline at a rate that has exceeded demand.
Unconventional treasure: Shale gas is trapped deep inside rock formations.
Shale gas is a new and abundant source of natural gas, trapped in rock formations. Oil companies have known about it for decades but always dismissed it because it was too expensive and difficult to extract.
In the past few years new technologies that pump water underground to fracture the rock and free the gas have been perfected. The breakthrough has opened a new frontier for the energy industry and turned long-held assumptions about the world’s dwindling supplies on their head.
via Shale gas blasts open world energy market on Propurchaser
Shale gas buried underground is estimated to increase recoverable gas in the world by 50%. Shale oil would allow oil reserves to expand by 10%. The US Energy Information Administration changed its estimates after a new study where it took into account twice as many oil and gas fields than in 2011.
Japan, the world’s biggest importer of LNG, pays about $18 per British thermal units, versus$10 in Europe and $3~4 in the U.S. It is tired of paying such a price for a resource that has become so important. So Japan is preparing to launch the first LNG futures market.
The low price in the U.S. is due to the shale gas boom in the country and to the fact that the gas does not need to be liquefied. In Europe, there are spot markets for LNG which constantly take into account the state of supply and demand.
The energy revolution experienced by the United States for the past ten years will not come to Europe anytime soon. Members of the European Union are indeed very divided on the issue of the exploitation of non-conventional energy resources.
In November 2012, after 3 studies published earlier by the European Commission which concluded that Europe would not reach energy self-sufficiency, the European Parliament invited to comment on the development of shale gas, was unable to pass a binding resolution. In the end, the two resolutions adopted in Strasbourg just called for the Member States to exercise caution in this area because of environmental constraints.
A binding resolution encouraging to explore or exploit shale reserves would probably not have had a majority of votes because of many European MPs opposition, as risks associated with shale gas extraction are not perceived in the same way throughout Europe.