Birchcliff Energy Ltd T.BIR

There is always 2 sides.

[AboveBoard]

There has been a huge upswing in natural gas prices.  It has pulled back a bit.  What goes up rapidly can go down rapidly too.  The weather card has been played.  The war card has been played.  Storage not rising to old normals has been played.  Will the pullback come now?  There are limitations to growing to the moon.  Sceptical that natural gas prices will remain high.  We will see.

[TouchDown12]

I get it - and a pullback maybe warrented to serve to consolidate NG sector in general. However, with all that said, Oct. 20 is just 180 days away.... and look at the incredible CF BIR generates at even 5USD HH / 5 AECO - a 30% correction from here. Anyhow, i think this is a market where everyone will be right at BIR on any given day - up, down, sideways, - but my question to myself is - what

[Barkis]

AB/TD Have you thought about things in these ways yet? 1. Electric cars do not run on electricty - here in N/A  in reality they run they run on natural gas, coal, nuclear, hydro power and renewables - in that approximate order. Nifty trick by those with a lot of pull  to get us to think these vehicles are a lot "greener"  than the old ICE's eh?. 2. "Oil as a by

[TouchDown12]

Thanks for your 2 points Barkis. Thinking about about a lot of things these days. Still have 70% of my exit holdings from 2 years ago (after the blood bath in March 20); so still very much committted. I'll add a 3rd point: 3. ever think about the power of the petro-dollar; like the CDN $$; and that the power won't be the Dollar part (The BOC printing Part) - but the Petro part. The Petro

[Barkis]

TD I am a little surprised that the CDN dollar has not risen a lot with these fossil fuel prices. If this was 10 years ago these prices would have put the loonie on par with the fedbux for sure. Unfortunately the "pandemic" really  gave the entire west world  an excuse to print and distribute fiat in a globally co-ordintated and at unprecented levels. Me-thinks this a root

[AboveBoard]

Natural gas prices 1998 up to March 2022. https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm   Off topic but related, https://cei.org/blog/wrong-again-50-years-of-failed-eco-pocalyptic-predictions/  

[Barkis]

AB $5.00 US gas does sound so 20th centuryish at this point. Illinois basin coal (one of the more exportable types) is going for $5 on a BTU equivalent basis now. Add the extra cost associated with burning that coal in relatively inefficent coal plants and then trying to dispose of the ash and the liability of cleaning up all those toxic ash ponds and burning $7 gas sounds like a good

[TouchDown12]

Good research and notes Barkis! TD12

[AboveBoard]

Hi Barkis, There exists alot of oil and natural gas in the ground.  Drilling will bring more oil/ng on stream.  It will happen.  Most companies seem to be cautious not to overextend but greed usually prevails.  If the plan is recession then industry use for natural gas will plummet.  So more production along with less use may result in greater ng price

[Burgersandfries]

Hey AB if we have a recession I'm thinking heating and cooling of buildings doesn't slow down nor does power generation for running anything electrical so gas shouldn't be effected too much..less driving if that happens in a recession I'm not sure it does but means less oil which means less nat gas as a bi product. Just my thoughts not sure if I'm right

[AboveBoard]

Hi burgers and fries,  what you are saying is partially correct.  However, industrial usage which accounts for 35% consumption would plummet in a recession.  I'm only being cautious.  Remember how the markets were driven to the bottom due to the governments pushing the covid narrative.  They upset supply chains, over spent, caused businesses to go bankrupt, etc.  

[Barkis]

Here is a chart from the EIA on long term industrial consumprion of natural gas (monthly) GFC (2008)  & Covid (2020) slowdowns are clearly visible - looks like a 10% hit to consumption in each case. Long term trend is still up. https://www.eia.gov/dnav/ng/hist/n3035us2M.htm Here is the chart for gas fired electrical power consumption. Similar but a slightly bigger hit I would say

[TouchDown12]

Barkis - I concur. US energy strategy for the next 6 months (till mid-terms) will be to focus on oil. NG has more indirect cost effects in the summer (through electcity bills) which makes the utilities the front-man on NG price increases over the April-October period. After that, NG will get consumed more directly by homeowners and that will be when the NG price increases will become top of mind

[Barkis]

TD Looks like that's what may be happening -  robbing Peter to pay Paul - it's what politicians do best. I think the natural gas price is arbritary right now. The market is asking for more production and the price will probably just bounce around (at higher than winter values) till it sees what kind of production increase response it  is getting from the producers. Barring any

[Barkis]

Hi AB. Thanks for the input.  I am thinking that there is a better floor underneath natural gas vs oil if things slow down. The US is sellling thier oil reserves at at fast enough rate to keep a lid on oil prices for now. IMO. I think what they have now in storage can support 30 days internal usage. Natural gas currently in storage will support about 20 days. The US still has the option of

[Barkis]

Correction: 80 amps will probably run about 10 large refrigerators - that still a lot - especially if you try to plug in more than one EV per home at the same time.