Yachtie
Posts: 3593
Joined: 1/18/2012 Status: offline
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quote:
ORIGINAL: Arturas since we are setting on the cheapest and most abundant amount of gas reserves in the world and now know how to get them then we encourage their use in making it cheaper to run industry here than in China and this will rebuild our middle class. Our industry comes back home. Fracking, which allows drillers to get gas and oil from shale deep underground, triggered a revolution. Gas production in the US has been setting new highs, and as supply overwhelmed demand, prices have collapsed. Gas in storage is at a record high for this time of the year, and some doom-and-gloom prophets maintain that storage will reach capacity this fall, and that producers won’t be able to get rid of their gas and will have to flare it, pushing its price to zero. ... Turns out, the shale gas revolution is an uneconomic activity even at much higher prices and is sustainable only for a limited time and only by blowing through loads of borrowed money. Now debt has piled up, cash flow is negative, and solvency risks are gathering on the horizon. Meanwhile, the low price of gas has bent the demand curve: utilities are shifting massively from coal to gas for power generation. Their demand is eating through the record amount in storage and will clash later this year with diminishing production. It’s a classic example of how a price that is too low will spike, but only after a monumental massacre in the industry. Read.... Havoc and Opportunity in Natural Gas. Just some food for thought.
< Message edited by Yachtie -- 5/24/2012 12:00:17 PM >
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“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC “Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell
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