Winter is coming, should we be looking at Natural Gas?

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I’ve been reading about fuel oil shortages in the north and the prediction that this will be a cold wet winter so I was wondering what your thoughts are on getting back into natural gas…doc

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Hi @physician,

Those 2 things are not related.

Even if the price of heating oil sky rockets, people can’t easily switch to nat gas or propane.

You need to look at nat gas pricing and supply to properly judge future pricing on it.

Are gas prices near historic lows? Are supplies lower than normal?

A companies like CTRA & PXD or pipeline operators might be what you want to look at.

Does that help you?

Gene
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To me the real concern is LNG to Europe. If Russian gas is not available and natural gas is abundant here, much may be shipped to Europe as LNG. But also from the Mideast and elsewhere.

Fracking makes natural gas cheap and readily available. We usually use $4/1000 cu ft or million BTUs as a typical price for cost estimates. Current price is abt $2.60. Cheap and readily available.

If gas becomes short for some reason, will it go to Europe? Or will we keep it?

Otherwise its an abundant commodity and prices will respond accordingly.

There was a time when prices of interstate natural gas were regulated (but not gas that didn’t cross state lines). I recall a time when we used $10/thousand in caculations. But that was long before fracking.

Much of the Northeast got natural gas late. Many homes there are still heated with fuel oil. When I moved to Baltimore in 1988, they were not taking new natural gas customers. My new home had a heat pump. They were arranging to receive LNG in Cheseapeake Bay. And a terminal in Boston harbor was thought to be a big safety risk.

Now natural gas is very abundant in the Marcellus Shale region in western PA. Shell is even building an ethylene cracker there (a huge investment) probably to make polyethylene (and ethylene derivatives) there rather than transport them from the Gulf.

In World War II, German submarines were torpedoing the tanker ships used to bring crude oil to refineries in the northeast. In response they built two of the first long distance pipelines to serve the northeast. They were Big Inch and Little Inch. After the war they were converted to natural gas.

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Thanks for the responses…doc