Long Run Explor Ltd Ord WFREF

RE:RE:RE:RE:RE:Over Supply Continues to Plague Market

[JohnJBond]

Natural gas supplies continued to build in the US despite low gas prices because it is a side effect of shale oil production.    As Shale grew, so did natural gas.

As shale drilling declines, so will natural gas.

The most interesting part for me is the first potential shale oil wells to get dropped from the drilling scheudule are those with the lowest returns.    I suspect (but I do not know), that the least financially attractive shale wells produce the highest amount of natural gas.

If the above suspision is true, then there will be a larger reduction in natural gas production in North America, than the reduction in oil.   

This is also one of those thing not making it into the news.

Regardless, at the end of this year, there will be less natural gas production in North America, just as there will be less oil production.    The natural gas price reponse should not be underestimated.