Canadian Money Forum banner

1 - 12 of 12 Posts

·
Registered
Joined
·
1,077 Posts
Discussion Starter #1
I came across and article this morning in the Globe & Mail talking about natural gas going forward.

"Goldman Sachs raised its forecasts for key natural gas price benchmarks on Wednesday, saying falling supplies and colder weather in Asia and Europe made for a “perfect bullish storm”. Any opinions as far as how this could effect any canadian specific natural gas related stocks. Mind you forecasts are not always correct and are just forecasts made by investment businessess.
 

·
Registered
Joined
·
5,438 Posts
^ Right, just want I need are gas prices going up ... in the dead of winter (Canadian).
 

·
Registered
Joined
·
442 Posts
I came across and article this morning in the Globe & Mail talking about natural gas going forward.

"Goldman Sachs raised its forecasts for key natural gas price benchmarks on Wednesday, saying falling supplies and colder weather in Asia and Europe made for a “perfect bullish storm”. Any opinions as far as how this could effect any canadian specific natural gas related stocks. Mind you forecasts are not always correct and are just forecasts made by investment businessess.
I don't make predictions, but there are all kinds of oil and gas that is still priced at 1/4 to 1/10th 3 year highs. They are also up 3X to 6X from the late March lows, so the easy money (or in my case, recovery of losses) has already been made.
 

·
Registered
Joined
·
3,584 Posts
My favorite energy stock, but of course perhaps speculative is Pulse Seismic (PSD). As long as the oil and gas industry does not completely die, in Canada, this company will participate. If any boom occurs, in either oil or gas, their business will prosper. If business is bad in either, oil or gas, resulting in mergers, PSD usually gets big paydays from that, and most importantly, they can survive on revenue crumbs since all they really need to maintain their business is a person to answer the phone, someone to organize and send the surveys and perhaps a financial guy to pay the bills. Lastly they are a monopoly. Can't get a bigger moat then that.

Added to all the above is the fact that the stock is basically currently priced for bankruptcy, which pretty much cannot ever happen, when you factor in the value of their seismic library and the fact that their overhead is so low and could probably go lower if required.

(Note: PSD must be evaluated on a free cash flow basis since they are allowed large non-cash depreciation amounts on any library purchases, usually resulting in no or very low taxable income, but of course all the cash is there and because of this advantage, more of it goes to the benefit of shareholders)
 

·
Registered
Joined
·
2,920 Posts
Natural gas production is down year over year in the US, but large inventories has held the price at a lower level than otherwise may be expected. Drilling for natural gas is also still way down. Meanwhile, LNG exports are rising, and demand in Europe and Asia is through the roof. Something has to give. If inventories hadn't been so large heading into this season, or if winter was extremely cold (not usual during La Nina years though), we would already be at double current prices easily, if not more. Some LNG cargos are going for 15 times North American/NYMEX natural gas prices.

Goldman has made a pretty self evident observation. Without significant additional drilling, natural gas production and inventories will keep dropping unless drilling really picks up quick.
 

·
Registered
Joined
·
5,385 Posts
Natural gas production is down year over year in the US, but large inventories has held the price at a lower level than otherwise may be expected. Drilling for natural gas is also still way down. Meanwhile, LNG exports are rising, and demand in Europe and Asia is through the roof. Something has to give. If inventories hadn't been so large heading into this season, or if winter was extremely cold (not usual during La Nina years though), we would already be at double current prices easily, if not more. Some LNG cargos are going for 15 times North American/NYMEX natural gas prices.

Goldman has made a pretty self evident observation. Without significant additional drilling, natural gas production and inventories will keep dropping unless drilling really picks up quick.
The article seemed to be about Asian Nat gas, are similar things occuring in Canada?

In expect that the energy markets are going to have a massive COVID blip that will mess with simplified stock analysis for a while.
I think there could be buying opportunities, but it matters how quickly the anti-oil groups push forward their agendas.
 

·
Registered
Joined
·
442 Posts
The article seemed to be about Asian Nat gas, are similar things occuring in Canada?

In expect that the energy markets are going to have a massive COVID blip that will mess with simplified stock analysis for a while.
I think there could be buying opportunities, but it matters how quickly the anti-oil groups push forward their agendas.
To the extent we can move LNG out of North America, it will reduce supply here and boost our prices. Something like 5 or 7% is currently being exported. Too bad we don't have even one LNG export facility up and running (I believe, may be wrong) in Canada among the dozens that have been planned and delayed or abandoned over the decades. At least with the Americans getting some off the continent, we score a few cents more selling into the relative vacuum thus created.

Buying opportunities? Who knows. Consider PEY ion my portfolio which had a low of under $1 circa March 2020, today around $4, a 4 year high of about $38. You would think it would be relatively safe buying at $4 in a $1-$38 range with current developments, but anything is always possible.
 

·
Registered
Joined
·
2,920 Posts
The article seemed to be about Asian Nat gas, are similar things occuring in Canada?

In expect that the energy markets are going to have a massive COVID blip that will mess with simplified stock analysis for a while.
I think there could be buying opportunities, but it matters how quickly the anti-oil groups push forward their agendas.
Asian LNG is red hot, but will settle down soon as there still is reasonable worldwide supply. My point is though that North American NG production is already down year over year, drilling is down, but consumption is steady or up here as well as much higher everywhere else - it is hard not to be optimistic about NG over the next few years. Anti-oil groups continue to be positive as there has been no reason why demand won't fully return and more and they continue to pressure supply. Those with operating assets and pipeline access in the ground will do very well.
 

·
Registered
Joined
·
357 Posts
BC Chamber of shipping news. ( 2021-01-15)

In a record-breaking deal, BP has chartered the ship LNG Abalamabie for $350,000 per day. It is the most expensive cargo-ship charter in history, surpassing the $300,000-per-day peak previously recorded in the very large crude carrier (VLCC) segment. The price of liquefied natural gas (LNG) and shipping rates have hit record highs because of the bottleneck, supply constraints and heavy demand from Asia, where freezing weather has placed the energy supply system under strain. The spike in prices and demand is the culmination of a deeper trend as China, India and other Asian nations have bought LNG as part of efforts to diversify from coal. Congestion delaying LNG shipments via the Panama Canal is expected to last through the peak demand winter months with ships carrying LNG from the United States to Asian markets waiting for up to two weeks in December to navigate the canal.
 

·
Registered
Joined
·
206 Posts
one of the items on my newsfeed right now is Japan paying through the nose for LNG because they're having some serious issues with power outages and electricity costs. I've owned Gazprom for years because it seems to be perpetually cheap relative to peers and pays an attractive dividend.
 
1 - 12 of 12 Posts
Top