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Parallel Energy Trust T.PLT.DB


Primary Symbol: PEYTF



GREY:PEYTF - Post by User

Post by petersterncanon Nov 13, 2012 10:47am
233 Views
Post# 20593120

Unexpected...

Unexpected...

Well I have to say that with the recent good news releases, I would have expected PLT's price to be rising more than it has.

I guess people in the market are focusing more on PLT's Q3 numbers, are ignoring the reasons why the numbers were lousy and are ignoring the much rosier future outlook.

I'm guessing PLT is gonna have to string together at least a few quarters with no significant bad news before the price moves.

And I'm guessing this story doesn't help matters either:

https://www.stockhouse.com/columnists/2012/nov/13/time-to-take-profits-in-natural-gas-stocks

But the conclusion in the article that "any move will be short lived because massive amounts of NG coming on the market in the coming months" isn't accurate.

First off... I don't see big companies like Exxon spending the money to drill for more NG unless prices are quite a bit higher.

Second... In 2013, the NG glut in North America should be somewhat alleviated due to investments in infrastructure that enable the export of NG to international markets where the price of NG is much higher (Well over $10 per mmBTU). Liquifying and exporting it adds something like $4 per mmBTU, for a total cost of about $7.50 to $8.00 per mmBTU... and then turn around and sell it for around $14/mmBTU in Europe or $17/mmBTU in Asia. And I wouldn't be surprised if over time, companies figure out ways to reduce the cost of liquifying and shipping NG. And that means, NG will trade more like oil and there will be less in the way of regional pricing dispairities.

While I don't think we'll see the NG price highs 2005 and 2007, I do think that NG could double from where the price is now for the simple reason that current prices don't warrant much incentive to ramp up production. And as more NG gets exported out of North America, you will see NG prices move up somewhat in North America combined with the price dropping somewhat on other markets.

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