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Weather the storm: Oil and gas experts predict oil, gas prices to spike in 2010
CARTHAGE — Dozens of drilling rigs, trucks and extraction tools sit idle in what some locals call the “gas graveyard” along a northeast section of Loop 436, and officials are worried about one of the leading industries in East Texas.
“I’ve never seen it this bad,” City Manager Brenda Samford said. “This time last year, many of those same yards were empty because companies were drilling everywhere. It would make my job easier if those times were to return.”
That return might be soon.
Oil and gas economists project gas prices will rebound from record lows by early 2010, which could eventually spawn another drilling boom across the region.
Foreign demand and the need for heating oil in the New England states this winter might drive some oil and gas workers back into the field, said Ken Morgan, Texas Christian University geology professor and director of the TCU Energy Institute.
“Going into 2010 we expect to see things heat up,” Morgan said. “But right now there are some indicators we are seeing in the market that are suppressing natural gas prices and making it difficult for companies to start new drilling projects.”
Natural gas, trading for more than $10 per thousand cubic feet between June and July 2008, is selling in the range of $4.64 per thousand cubic feet and was as low as $3.60 in recent weeks, according to the Baker Hughes report. Baker Hughes is an oil and gas company that monitors drilling operations worldwide. A barrel of crude oil was trading in the $69 range Friday, compared with prices that topped $130 a barrel during summer 2008.
Prices might not be the most attractive for investors, but consumers are getting at least a temporary break at the pumps.
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What do you think?
Comments
By Buck
October 5, 2009 9:13 PM | Link to this
I have worked in the oil & gas production . I like the prices like they are.Maybe the oil & gas companies & service companies will quit wasting so much money.They pay management & others much more than they are worth,they do little for their pay & baby the workers to keep from having to do work theirself.
By Steve
October 5, 2009 5:31 PM | Link to this
Natural gas futures prices may have been in the mid-$4 range recently, but the wellhead cash price has been running between $2 and $3.50 for several months. We’ll be very lucky to see a turnaround within the next year. We have indeed seen the industry like this before. We called it the 1990’s. Feb. of 1992 saw $0.97 per mcf prices in the counties you cover here.