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$2 Natural Gas: A Bottom?

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  • Description

    Stephen Schork of The Schork Report weighs in on natural gas prices.

  • Duration 3:34
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This transcript is automatically generated

Thank you.

Natural gas prices ticking slightly higher -- the Department of Energy reported a smaller than expected build in weekly supplies.

But we are still stuck -- decade lows and look at that we're sitting on -- to box.

This happen for the first time yesterday since January of 2002 -- shark is the editor of the -- report.

Stephen what do you think about this trade below two box wow.

Well it's just been -- story here -- for the last three years to commodity bubble natural gas prices have just decouple from the rest of the energy complex.

In this come back BO scenario and economics.

High -- these are the best cure for high prices at ten years ago when everyone thought the united debate candidate -- running out of natural gas what happened.

Prices -- Unbelievable level that it's all that that there more than 100 dollars a barrel oil equivalent at a time when oil was -- trading at fifty dollars a barrel.

What -- that do that spurred a lot of supply could mark she LL NG so -- So we just continued.

Supply -- continues to outweighed demand and that this.

Still -- that is up two dollars which is about sixty dollars a barrel oil equivalent it's still a bearish market.

Here is Steven this is what concerns me about this it's a great boon for consumers.

There's so much that we can use this natural gas for.

But we need to start using it or start selling it or start exporting it before people start to stop drilling it has the prices so low right.

What we you have to be careful because that's where the bulls and natural gas have gotten themselves into a lot of trouble over the past three years.

Take years ago we -- -- -- that six dollars these -- was produces gas produces and produced.

And they load of the pot and they loaded to -- -- -- loaded I'd bring the problem is now Oriole -- trading at a fifty to sixty.

621.

Ratio therefore you can take -- gas gas but has propane.

UK and Spain did it that it price stop the oil market it doesn't matter what the natural gas -- natural gas well we keep our consumers is not date.

Investing component that -- -- matter anymore.

Get gas producers could pull liquid rich gas out of the ground stripped out all of -- natural gas liquids propane so forth.

And that won't pay for the money dual -- on the natural gas.

In the -- is where we go know what those what the bottom of natural gas prices are because produces.

Still make money stripping out gas from the screen.

That just because we're below two dollars -- is not a reason to get bullish natural gas -- fundamentals have changed this market and even -- but -- Yeah -- -- I try to translate for people what you just said there you said natural gas producers are not losing money at those prices that we are trying to say.

Well they are the producers can make money off of a -- different component of the screen that is at -- propane -- natural gas liquid.

They -- guests to guess that you and I used utter burner tip they are losing money on that part of the equation.

But got money -- -- there is being offset.

By the -- -- be earned elsewhere in other parts of the natural gas.

So they are making money -- you're losing it.

You know what would make no mistake about it -- we dollars they are losing money but when you've got oil trading at 505561.

Ratio to Nat gas.

That is more than compensating them for the part of the stream -- of these.

And knowing that cited seems -- starts out with a report -- seeing that natural gas prices won't rebound until 2013 even that might be optimistic.

Seeing a sharp thanks so much for joining -- right we can't.

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