{"id":521403,"date":"2010-04-08T14:07:00","date_gmt":"2010-04-08T18:07:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/even-as-natural-gas-players-throw-in-the-towel-goldman-comes-out-and-says-prices-are-unsustainably-low-2010-4"},"modified":"2010-04-08T14:07:00","modified_gmt":"2010-04-08T18:07:00","slug":"even-as-natural-gas-players-throw-in-the-towel-goldman-comes-out-and-says-prices-are-unsustainably-low-ung","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/521403","title":{"rendered":"Even As Natural Gas Players Throw In The Towel, Goldman Comes Out And Says Prices Are Unsustainably Low (UNG)"},"content":{"rendered":"<p>We just posted this story from our partners at <a href=\"http:\/\/www.businessinsider.com\/natural-gas-producers-drill-for-oil-2010-4\">OilPrice.com<\/a> about how natural gas players are going to the &#8220;dark side,&#8221; drilling for oil, a commodity that might actually make it some money.<\/p>\n<p>Goldman Sachs seems to think they&#8217;re calling the bottom and that prices for natural gas can only be headed up.<\/p>\n<p>In a new report out today analyst David Greely calls current prices unsustainably low.<\/p>\n<p>Here&#8217;s the breakdown of his argument:<\/p>\n<p style=\"padding-left: 30px;\">The current low NYMEX natural gas prices are already triggering a <br \/>series of reactions that should tighten the supply-demand balance&nbsp; <br \/>NYMEX natural gas prices have declined meaningfully over the past few weeks, as an early <br \/>end to winter temperatures has been reflected in high inventory numbers and an earlier- <br \/>than-normal start to the summer injection season in the United States (see Exhibits 1 and <br \/>2). However, we believe that the decline has taken NYMEX natural gas prices to a level that <br \/>motivates a substantial tightening of the supply-demand balance. <\/p>\n<p>NYMEX natural gas prices have fallen substantially below NYMEX Appalachian <br \/>coal prices, which have remained stable over the past month (see Exhibit 1). This <br \/>has re-established the economic incentive for coal-to-gas substitution in US power <br \/>generation. <\/p>\n<p>NYMEX natural gas prices have also fallen substantially below UK NBP natural gas <br \/>prices (see Exhibit 1), reducing the economic incentive to send LNG cargoes to the <br \/>United States. <\/p>\n<p>We also believe that the decline in NYMEX natural gas prices will motivate high- <br \/>cost US natural gas producers to curtail production. It has recently been reported <br \/>that the US Department of Energy (DOE) production data has not accurately <br \/>captured this response, and that it is currently overestimating US domestic <br \/>production. With the introduction of the revised EIA-914 survey, we expect a more <br \/>accurate picture of the response of high-cost US domestic production to lower <br \/>prices to emerge.<\/p>\n<p style=\"padding-left: 30px;\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bbe1aeb7f8b9ab051570200\/chart.png\" border=\"0\" alt=\"chart\" \/><\/p>\n<p style=\"padding-left: 30px;\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bbe1af47f8b9ad34d540700\/chart.png\" border=\"0\" alt=\"chart\" \/><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/even-as-natural-gas-players-throw-in-the-towel-goldman-comes-out-and-says-prices-are-unsustainably-low-2010-4#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/1a-5PpFJZe0\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>We just posted this story from our partners at OilPrice.com about how natural gas players are going to the &#8220;dark side,&#8221; drilling for oil, a commodity that might actually make it some money. Goldman Sachs seems to think they&#8217;re calling the bottom and that prices for natural gas can only be headed up. In a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-521403","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/521403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=521403"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/521403\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=521403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=521403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=521403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}