Replies to post #273261 on $Stock*Shop*Charts*News*Option$

[Stock Lobster]

BlogStocks: Natural Gas: The next energy shock for Americans

Posted Apr 18th 2008 10:37AM by Joseph Lazzaro
Filed under: International markets, Other issues, Commodities, Oil

American citizens and corporations, already stung by the more than 200% increase in oil and gasoline prices since 1999, most likely will be confronted with another energy shock in the months and quarters ahead: natural gas.

U.S. natural gas prices have risen an astounding 93% since August 2007 -- this despite a mild winter in much of the nation -- as rising demand from energy-hungry Asian buyers, such as South Korea and Japan, have forced up natural gas' price, The Wall Street Journal reported Friday. (Subscription required.)

Natural gas, which traded Friday morning in the United States at $10.22 per million BTUs, heats 50% of U.S. homes, generates 20% of the nation's electricity, and is intrinsic to making everything from fertilizer to plastic bags.

International natural gas demand rises

Further, with solid international demand, and a U.S. price that's roughly one-half the global price, many analysts argue U.S. natural gas prices are likely to increase substantially, moving forward. That would create another "core inflation" price accelerator to a U.S. economy already experiencing rising core/retail inflation from oil's enormous rise from $25 per barrel in 1999 to more than $110 today.

But not all economists and analysts agree. Economist Glen Langan told BloggingStocks Friday natural gas' price in the U.S. will depend on a number of factors, including regional use, conversions from coal-fired electric plants to natural gas (which is a cleaner energy form), diesel (particularly buses) conversion to natural gas, new household formation, the expansion of the natural gas transport grid, the price of oil, and the weather, among other factors.

"We're not likely to see a straight vector up to the global natural gas price, but Americans should be prepared to pay more, considerably more, for natural gas in years ahead," Langan said. "Probably the biggest factor will be electric power conversions and electric demand. If gas-fired plants totally displace coal for environmental reasons, natural gas will register double-digit increases for at least the next 3-5 years."

Beyond that time period it's difficult to predict energy prices, due to the development / discovery of substitute energy forms and alternative energy sources, Langan said. "And with oil and natural gas marching to stratospheric heights, there are going to be substitutes," Langan added.

Tags: Asia, coal, emerging markets, energy, global economy, inthenews, Japan, natural gas, oil, South Korea

http://www.bloggingstocks.com/2008/04/18/the-next-energy-shock-for-americans-natural-gas/

[Stock Lobster]

Reuters: US oil services stocks surge on Schlumberger views

Fri Apr 18, 2008 8:36pm BST

NEW YORK, April 18 (Reuters) - A bullish outlook from Schlumberger Ltd (SLB.N: Quote, Profile, Research) propelled the oilfield services sector to record highs on Friday, just days ahead of earnings reports from several industry heavyweights.

Schlumberger reported disappointing first-quarter earnings, but Chief Executive and Chairman Andrew Gould said oil and gas companies were expected to pour more money into efforts to increase their output.

"It's more and more a year in which growth is going to strengthen significantly in the second half," Gould told analysts on a conference call.

A nearly four-year rally in oilfield services company stocks stalled at the end of 2007 as exploration activity in North America tailed off, prompting investors to sell off holdings in the sector on fears that energy producers were scaling back spending.

But as crude oil charged to record highs above $115 a barrel and natural gas prices rallied to a 27-month peak, industry sentiment is again turning bullish.

The Philadelphia Stock Exchange Oil Service Sector index gained 3.5 percent to 325.6 points, topping its previous record of 322.7 points from Dec. 31. That index sunk 27 percent in January, before rallying in March.

"I think what Schlumberger did today is confirm the long-term story in the service sector," said Jason Putnam, analyst at Victory Capital Management, with $65 billion in assets under management that include holdings in many oilfield service companies.

"This is giving investors more confidence that the (bullish) cycle is going to endure," he said.

Schlumberger shares rose 5.7 percent to $100.70 in late Friday trade, while rival Halliburton Co (HAL.N: Quote, Profile, Research), which is more reliant on North American `usiness, saw its shares climb to a new record of $46.92, up 4 percent. Halliburton is expected to report earnings on Monday.

Weatherford International Inc (WFT.N: Quote, Profile, Research), which also reports first-quarter earnings on Monday, rallied more than 6 percent to a new high of $84.77, while Baker Hughes Inc (BHI.N: Quote, Profile, Research), which reports on Tuesday, rose 4.2 percent to $80.59, a three-month high.

Smith International Inc (SII.N: Quote, Profile, Research), BJ Services Co (BJS.N: Quote, Profile, Research) and Noble Corp (NE.N: Quote, Profile, Research), which all report earnings next week, were between 2 percent and 6 percent higher.

U.S., CANADA WORRIES FADE

While energy investments in Asia, the Middle East and Russia have shown no signs of faltering in the past year, investors had worried that heavy spending in the United States and Canada would drop after several years of strong increases.

"I think what has really changed fundamentally here for the industry is that the outlook for North America is considerably better than it was at the beginning of the year," said Bill Herbert, analyst with investment bank and research firm Simmons & Co International.

The weekly count of the number of drilling rigs actively looking for oil or gas deposits in North America stood at 1,927, up 72 from the previous year, according to data compiled by Baker Hughes. (Reporting by Matt Daily, with additional reporting by Anna Driver in Houston; Editing by Braden Reddall)


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