Analysts may be behind the ball on natural gas according to a latest Schork report.
While Stephen Schork admits to being caught by the strength of natural gas lately, he finds it partly unexplainable at the same time.
He also highlights a letter from the President of Integrated Petroleum Technologies, that warns us not to expect strength for natural gas in 2010 due to a lot of supply being produced.
CNBC: “Activity level has really turned up. All of these horizontal projects are intense and the technology is moving very fast. One of the recent graphs [The Schork Report , September 9, 2009] showing the average gas rate per well compared to prior years tells a lot. I saw one in a Morgan Stanley report recently too. We have been waiting for the analysts to catch up with this fact. The rig count reduction as applies supply was misleading….. The oil and gas producers have been through these cycles many times and know how to tighten up and high grade projects… One extreme dictates another. I would be careful about a bullish gas stance next year and I have no faith in an increase in industrial demand…”
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