"In a sign that low natural-gas prices are probably here to stay, big US energy companies are pushing to sign long-term contracts with electric utilities and other customers. Major producers such as Chesapeake Energy Corp. and Devon Energy Corp. are trying to reach multiyear deals--likely five or 10 years--that would guarantee them buyers for their gas but would deny them the benefits from any sudden price increases. ... But huge new gas fields in Texas, Lousiana, Pennsylvania and elsewhere have led to a surge in US natural-gas producrtion, glutting the market even as the recession has sapped demand for all forms of energy. ... 'The days of double-digit gas prices in the US are over,' said Chesapeake Chairman and Chief Executive Aubrey McClendon", my emphasis, Ben Casselman & Rebecca Smith at the WSJ, 30 December 2009, link:
$5.57 natural gas looks cheap to me. I suspect McClendon will ultimately do as well with his advance gas sales as Barrick did with its advance gold sales, see my 21 December 2009 post: http://skepticaltexascpa.blogspot.com/2009/12/barrick-rings-bell.html. I agree with Exxon, see my 2 January 2009 post: http://skepticaltexascpa.blogspot.com/2010/01/exxons-acquisition.html.
1 comment:
I've said it before... oil and gas as the "new" reserve currency...
Imagine energy companies as society's central banks!
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