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Surge in Natural-Gas Price Stoked by New Global Trade
Ann Davis and Russell Gold, Wall Street Journal
Americans feeling the pain of record gasoline prices now face the likelihood of another fuel shock, from natural gas.
Prices in the U.S. have risen 93% since late August as power-hungry nations like South Korea and Japan compete in a global natural-gas market that scarcely existed a half-decade ago. Still, U.S. prices are as low as half the level of some overseas markets, suggesting they have much further to rise.
The global appetite for natural gas has profound implications for a U.S. economy already tipping toward recession and struggling against inflation pressures. The fuel heats half of U.S. homes, generates …
… Today, a tanker of liquefied natural gas, or LNG, pulling into port in Japan can command close to $20 per million BTUs, roughly double the price of the U.S. benchmark. As a result, the U.S. is having trouble attracting the imports it needs to supplement homegrown production. . .
. . . Overall, U.S. imports of LNG have slid over the past nine months to a five-year low, and natural-gas inventories are running relatively low. Deutsche Bank commodities chief David Silbert says that if the U.S. is unable to attract LNG supply this summer, prices could spike up sharply within a few months if a hot summer were to reduce the ability to build a cushion of gas going into next winter
(18 April 2008)
Pickens Reverses Position to Bet on Higher Oil Prices
Daniel Whitten, Bloomberg
Boone Pickens, a billionaire energy investor, said he reversed course and is betting the price of crude oil will rise.
Pickens, 79, the founder and chairman of Dallas-based BP Capital LLC, said today in a speech at Georgetown University that the price of crude will only continue to climb and demand will eventually be dampened.
“The position is long, not short,” Pickens told reporters after his speech. “I covered the short position, it was a mistake on my part. We missed.”
… World oil supplies won’t exceed 85 million barrels a day because of high depletion rates of existing wells, he said in his speech. This supports his belief in a climbing price.
(17 April 2008)
