GREY:CNKEF - Post by User
Post by
CanadianFemmeon Jan 03, 2018 6:04am
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Post# 27268317
Short Lived rally: Alberta natural gas prices soar 72%
Short Lived rally: Alberta natural gas prices soar 72% So we get the coldest winter in about 4 years, and CKE is still trading at $0.25. Talk about absolutely no investor confidence! As exciting as that was to live in the Freezing Alberta cold for the past 2 weeks (both our cars didn't start), all industry analysts agree the rally was short lived and the spike will not be sustainable even medium term unfortunately. Main reason? Similar to what PeterM1 has been saying all along on this board pipelines and the NG Glut and not weather are the main issue here. This article really puts into view the current Natural Gas situation affecting CKE and so many NG producers in Canada.
https://business.financialpost.com/commodities/a-very-very-short-lived-rally-alberta-natural-gas-prices-soar-72-as-wells-freeze-cutting-off-supplies
“Although the recent cold snap has been favourable to near-term spot prices, the underlying long-term view is there is increasing new gas coming on-stream from the Montney (in Alberta) and the Permian (in Texas) that show no sign of abating,” McCrea said.
Snippets from the article:
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"Between Christmas and New Year, AECO, Alberta’s natural gas price benchmark soared 72 per cent from $2.50 per thousand cubic feet to $4.30 per mcf as “extreme cold” warnings were issued for the entire province – and throughout much of Canada – amid Arctic-like temperatures."
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“Canadian gas prices are so low that any cold-caused demand increases have a material effect on the price – it’s just a lower price to begin with,” Auspice Capital president Tim Pickering said, adding that domestic natural gas prices are depressed relative to U.S. prices due to a lack of export infrastructure such as natural gas export plants.
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“The jump we saw in prices, it was impressive to see, but it’s very, very short lived,” GMP FirstEnergy analyst Martin King said of the recent uptick in AECO spot prices."
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"King said natural gas storage levels in Alberta are still significantly higher than the same period last year".......“It’s going to take a lot of cold for many, many weeks to make a sizeable difference in storage levels to put in a better AECO pricing for at least the first half of this year,” King said. “We are so over-stocked on gas right now, it’s crazy.”
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