You can see it clear as day in their hedging strategies...
Natural gas producers are increasingly bearish on prices for their sector.
The
numbers tell the tale. Canadian gas producers surveyed for the Oil and
Gas Investments Bulletin hedged AECO-sold production at $5.27 in 2011.
Hedge prices have dropped steadily for gas sold since—to $4.27 in 2012,
and to $3.29 for currently-hedged production in 2013.
Why the
falling hedge price? Because it made sense – Natural gas prices fell
steadily from the beginning of 2010 through to early 2012. Faced with
two years of declines, producers looked to stave off further price risk
by forward-selling (hedging) their output.
So what has happened since the second quarter of 2012?
Gas
prices have been rising. The monthly average AECO (the Canadian
benchmark price out of Edmonton AB) price is up 110% over the last year.
NYMEX gas has gained 95%. (more)
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