The update came at lunch between bites of brisket at this week’s DUG Midcontinent Conference in Oklahoma City: the price of natural gas, which startled the industry when it closed above $4 per million British thermal units (MMBtu) on Nov. 13, was up 17% at midday Nov. 14. By the end of trading, the jump was 18% in one day.
Couple that with NGL prices, most of which suffered double-digit declines last week, and the result is a slew of tightly squeezed margins.
The simple answer is that natural gas storage is very low and winter is approaching. But low storage numbers have been out there for months and winter has been on the calendar since Julius Caesar put it there in 45 B.C. EnVantage Inc. suspects that traders who sold short are reconsidering their positions.