Chesapeake Cuts Production. Will other producers follow suit? – Rig count (CHK)
|5 min CHK|
Natural gas futures awoke today from a declining vegetative state with CHK throwing the valves the left on 9% of their US dry gas production essentially shutting in 0.5bcf/d dry gas and up to 1bcf/d by by Q2 2012…….. this announcement caused a violent spike in NG futures.
The price throughout the day rose from from 2.31 to 2.619 and the (semi) popular ETF UNG up some 9% ….
|1 min NG futures.. more upside into 3.20 if this triangle holds|
The million dollar question is will Chesapeake’s competitors follow suit with production cuts or will CHK remain on it’s own. IF other major US producers follow suit you can surely bet on much upside in nat gas prices, especially if last portion of winter and spring is cold.
More longer term speaking..upside in a Nat gas prices can be bolstered if current US energy policy rhetoric hints at utilizing our vast reserves of nat gas…or more cuts cuts…
If i remember right i tweeted a few weeks ago.. “we have a lot of nat gas, its time to start using it” – time to start thinking about the above paragraph becoming a reality.
There is so much gas they are shutting in production.. wake up washington.