By OGJ editors
HOUSTON, Jan. 7 -- Weakness in Henry Hub natural gas futures prices might lower the US rig count during the second quarter, Merrill Lynch & Co. analysts in New York forecast.
"We continue to forecast 8% growth in the worldwide rig count this year vs. 2004; however, we are concerned that the US rig count may flatten or possibly decline if natural gas prices fall below $5/Mcf for more than a few weeks in the spring," said Mark S. Urness, director of oil service and drilling research (OGJ Online, Nov. 16, 2004).
If gas prices fell, the US rig count likely would decline early in the second quarter, Urness said in a Jan. 6 report.
John Herrlin, Merrill Lynch exploration and production analyst, said he is becoming increasingly concerned about the near-term risk of competition between storage gas and wellhead gas. However, his Henry Hub price forecast for the year remains $5.75/Mcf.
Barclays Capital Inc. analyst Paul Horsnell of London noted that the Henry Hub price for February delivery as of Jan. 5 was 4.6% lower than at the same time last year.