Natural gas prices are at $3.25, down off today’s high of $3.35, but up from a low of $2.89 a few weeks ago. It’ll be interesting to see what happens with drilling rigs now that prices are going up. Storage levels are at 2,411 BCF, 55 BCF below the five year average, and right about where they have been compared to the five year average for months. Drilling rigs are at 461, up a little from 453. Slow and steady…..
I ran across an interesting article about some companies building sailing vessels as commercial transport again. It’s an interesting read, just for the subject. It’s also interesting to see that it’s practically impossible to replace modern ships with sailing vessels, if we want to keep our economy.
Jude Clement does a dive into energy use over at Forbes.com and makes an educated guess as to what the future might hold for natural gas and oil.
European utilization of natural gas is also interesting to read up on.
Xiaomi, a cell phone company, has announced that they can charge a cell phone battery in eight minutes. This doesn’t directly affect the oil and gas industry, but it’s a precursor of things to come. The real barrier to switching from fossil fuels to renewables is battery tech, and if fast charging technology like this can be applied to cars, it will change the industry. It’s not time to jump on that train yet. One demonstration device doesn’t mean the tech will make it to cell phones. The fact that it can be done with cell phones doesn’t mean it can be done with cars. But if it can be done with cell phones it most likely will eventually make its way to cars.
Oil and gas companies have exercised restraint in the first quarter of this year, but natural gas prices continue to creep up. Will banks start lending more money to them? It’s still too early to tell.
As natural gas prices go up, energy companies are switching to coal and renewables. Mostly coal. There still aren’t enough renewables to make up the difference.
The large international oil and gas company, Royal Dutch Shell, was ordered to cut carbon emissions by 45% by a Dutch court. While that ruling only applies in the Netherlands, it will be interesting to see what happens in other European courts.
Pew did a poll which showed that 2/3 of Americans don’t want to completely phase out fossil fuels. That 1/3 must be pretty noisy, because I wouldn’t have guessed those numbers. Of course, that’s a poll, and you know how polls are.
This could become worrisome in the future. We currently use about 90% of our natural gas storage capacity. Natural gas demand doesn’t have to grow much for us to hit full capacity. There was some rumbling before COVID last year that we might hit full capacity last year. It bears keeping an eye on.
Pressure on the TETCO pipeline has been reduced. The TETCO pipeline moves a lot of gas from the Marcellus down to the Gulf Coast. This will reduce royalties paid to most West Virginia royalty owners as the price to move the gas through the pipeline will increase, reducing the price that companies can get for the gas.
The price of natural gas is going up, but so is the cost of doing business. Shale drilling requires steel, and steel prices are skyrocketing.
Libya is planning to raise oil output from 1.3 million barrels per day (currently) to 2.1 million barrels per day in the next few years. I’m sure OPEC+ will eventually want to have something to say about that.