By OGJ editors
HOUSTON, Dec. 20 -- Natural gas futures on the New York market fell to $3.951/MMbtu on Dec. 17 before rebounding during the trading session to settle above $4/MMbtu.
The Dec. 17 rebound halted a slide in gas prices during the week of Dec. 13-17 after gas reached a 4-month high of $4.637/MMbtu on the New York Mercantile Exchange on Dec. 9.
Current operating margins are insufficient to motivate oil and gas companies to invest enough on shale gas plays to balance the market beyond 2011, said analysts with FBR Capital Markets.
“As we do not see an abatement of service costs, [a] natural gas price increase will have to provide margin improvement,” FBR analysts said. Consequently, the firm raised its second half 2011 NYMEX gas price forecast to $5.50/Mcf from $4.50/Mcf.
Energy prices
The January contract for benchmark US light, sweet crudes rose 32¢ to $88.02/bbl Dec. 17 on NYMEX. The February contract gained 20¢ to $88.60/bbl. On the US spot market, WTI at Cushing, Okla., was up 32¢ to $88.02/bbl.
The January natural gas contract edged up 1.8¢ to $4.066/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 9¢ to $4.01/MMbtu.
Heating oil for January delivery nudged down by 0.26¢, settling at $2.473/gal on NYMEX. Reformulated blend stock for oxygenate blending for January rose 1.35¢, settling at $2.3178/gal.
In London, the February IPE contract for North Sea Brent crude rose 7¢ to $91.67/bbl. Gas oil for January declined $2.75 to $766.50/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes gained 2¢ to $88.78/bbl.
Rystad Energy.
