RE:The nest shoe to drop will be associatedhoubahop wrote:
with the price collapse of liquids associated with natural gas production.
NatGas producers are suppressing prices by increasing production expecting an economical value for their liquids.
Liquids price need to see a 50% haircut. That should calm some natural gas producers.
At least for western Canada, the price of condensate tracks light oil quite closely. It does this for the simple reason that condensate is used as a diluent to allow heavy oil and bitumen to flow through pipelines. It can be replaced, however, with a slighty greater quantity of light oil, which effectively ties its price to light oil. So, in order to get condensate prices to fall by 50%, you need oil prices to collapse.