Got Gas?

[MARKETWAVES]

Seems like no one ever talks about the energy sector here in this forum, so I offer my projection.... gas appears to be bottoming or searching for major support. Elliott Wave outlook....



TRADE AT YOUR OWN RISK… The purpose of these charts is to point out significant highs and lows based on Fibonacci Retracement lines and Elliot Waves which are highly subjective . This information is for educational purposes and should not be considered trading recommendations . All trading decisions are your own sole responsibility …

 

[MARKETWAVES]

Re: GOT GAS ?

GOT GAS ?.......Last Page....

 

[MARKETWAVES]

Re: GOT GAS ?

Stochastics are basing in July gasoline contracts 05 ..... This is typical every year it seems months before a major Summer holliday ,,, I dont think that it will take much negative energy news to make this move ...

On the daily charts we appers to have traced out a corective C - wave .... I will be looking at the longer term monthly charts to coinfirm this bottom that looks like is forming on the dailiy charts ,,,
should post soon ...

Anyone watching or following energy markets out there intersted in any extra comments let me know ....

Marketwaves

 

[DTM]

Re: GOT GAS ?

Yes mate, I'm interested in energy. There seems to be an inverse

relationship with the US markets and the price of oil.

Correct me if I'm wrong.

 

[Smurf1976]

Re: GOT GAS ?

1. The worldwide ability to increase crude oil (or syncrude, bitumen, NGL's, heavy oil or any other refinery feedstock) production over the short term from presently operating capacity is effectively zero. Any increase in output must come from either new liquids production capacity or increased NGL recovery.

2. There is quite a bit of new capacity, notably deepwater producton (eg. Gulf of Mexico) coming online over the next couple of years. However, production elsewhere is in terminal decline (eg. North Sea, North Slope, US/Canada) such that the new capacity is largely absorbed by declines elsewhere. The net effect is a slow but steady capacity increase over the next year or two.

3. Due to the above the availability of crude on world markets is effectively a function of demand or any unexpected REDUCTION in supply since an increase in supply beyond that presently committed is in practice not possible.

4. Demand is largely a function of (1) the economy (2) weather and (3) production of other fuels, particularly natural gas, for industrial use (particularly electricity generation).

5. Even if abundant crude is available, worldwide refinery capacity is not much greater than present crude oil production and product demand.

Judge for yourself how this will affect prices. I have not intentionally stated either a bullish or bearish view on the price although convincing arguments can be made either way at present.

In my opinion the key factor is how the overall world economy holds up. If it stumbles, then slowly rising supply combined with China reducing dependance on diesel generation (increasing supply of grid electricity from coal and hydro) and of course the speculative positions could send the price seriously lower. Conversely, strong growth in demand or a supply hiccup ought to send the price to the moon since the supply just isn't there. A fine wire balancing act IMO and I'm choosing to stay out at the moment. Long term I am very bullish though.

This is my opinion based on my own knowledge and is not investment advice.

 

[mime]

Re: GOT GAS ?

The major majority of my portfolio are energy stocks because of the worlds fierce demand for it. With China becoming the second global superpower I can only see more demand.

I think the world now can't supply enough oil to keep up with demand which should mean prices will rise. We won't run out of oil any time soon either despite what doomsdayers are saying.

 

[Smurf1976]

Re: GOT GAS ?

We won't run out of oil any time soon either despite what doomsdayers are saying.

Anyone saying that oil will "run out" obviously hasn't done much research into how an oil field, or group of fields, depletes.

Suddenly running out is a physical impossibility unless every oil field in the world starts using maximum contact wells (which tend to fail suddenly) AND they all mysteriously fail at once. Apart from the fact that most prodction does not rely on such wells (though the largest field in the world does, so the threat of a sudden decline in worldwide output is real) it is like saying that ALL the trains in the world will derail at about the same time or that ALL the dogs in EVERY country will die by the end of next week thus causing dogs to become extinct. Pretty unlikely...

As has been demonstrated at practically every mature oil field in the world, producion rises, peaks and then falls. The same phenomenon has been seen across whole countries (most famously USA). Worldwide production has also followed this course to date so it seems reasonable to conclude that a peak in production followed by a slow, relentless decline will ultimately occur rather than a sudden "running out"".

 

[MARKETWAVES]

Re: Got gas ?

Now ,this turned out to be a great trade after all …

The flag pole set- up from my earlier post really is holding up well ..
This is a great example of how I am always looking to buy on support ,
not buy break-outs ….

Buying break outs always seem to give me a sense of I’m chasing a paticular market , and quite frankly I don’t like chasing anything . Not all support areas hold up as I have tried to explain to Tech-a …

This is where Risk to Reward comes in …..Not money management .

Please don’t confuse these 2.


The rally appears to be intact , anyone entering this market of Gasoline in my humble opinion is getting in too late .. The train is already in motion ….


…………….Please, don't give me credit for pointing out these lines ... I have learned them form studying the work of
Fibonacci Retracements and Elliott Waves ..... These lines work well only when they are tied to certain Elliott Wave
structures and certain Fibonacci Retracement levels ..... outside of this they become less reliable...... a whole lot less reliable .
This is exactly the reason why you could never back test a particular stock or commodity for these lines without these 2
basic theories of understanding. NOT ALL CHART PATTERNS ARE TRADEABLE .
(This depends on your trading strategy or trading style )

ALWAYS REMEMBER ….


What makes a market place is all of our diffrences of opinions .
------- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
It is far more difficult to Exit a trade than to Enter a trade .... I am sure that you have heard that said before ,,,

THIS IS WHY ,

When making trade it just as important to have an idea where you want to exit as it is to place a stop to protect yourself from a move against you .
( THIS IS A PEARL OF WISDOM )


THERE IS NO HOLY GRAIL ///// I KNOW THAT YOU KNOW THIS ....


THATS WHY I TRADE ELLIOT WAVES , becase its giving you a probaility of where to look for a turn in a given market .....
The smaller the risk in relation to the price objective , the better chance of success in long haul .... (This is called Risk to Reward )

It’s just the way that is ...

Think of a Head and Shoulder pattern ... you learned of them long ago .... they always have a target based on the head and the neckline area ... This is not my design ... It was around long before all of us an will be around for some time after we are all gone.//

Please try to understand the price target in a head and shoulder set -up ... as an example , Because there are other patterns like symetrrical triangles and falling wedges and ascending triangles that also have price targets tied to them .... Traders have been measuring these price patterns for a long time ....

Surely ... they don't all make it to their targets or so called objectives , and I totaly agree with you , that they don't ..

But , it is the best premise there is to work on.....This is always explained and drawn out on charts ////



TRADE AT YOUR OWN RISK… The purpose of these charts is to point out significant highs and lows based on Fibonacci Retracement lines and Elliott Waves which are highly subjective . This information is for educational purposes and should not be considered trading recommendations . All trading decisions are your own sole responsibility …

 

[RichKid]

Re: Got Gas ?

Comments on local gas market and technology used in the US. I wonder how many co's here will be able to leverage the technology, or does it all depend on the gas price? Time for a contrarian play, oil is certainly rising, and quite a few people expect gas to follow, but not in this report:
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'Tight' gas not yet flowing in Australia
May 7, 2006 - 10:29AM
http://www.smh.com.au/news/BUSINESS...ng-in-Australia/2006/05/07/1146940396593.html

Gas that is hard to extract is big business in the US but Australian investors remain wary of local "tight" gas projects and analysts say a higher gas price may be needed to get them off the ground.

Geologists involved in the US industry say there are trillions of cubic feet of gas locked up in tight reservoirs in Australia and all we need is a high enough gas price to justify extracting it.

Tight gas deposits are held in rocks that have low permeability, which prevents the gas from flowing easily.

To allow the gas to flow, the pores in the rocks have to be opened up through a process known as fracturing.

There are different methods of fracturing and a good understanding of the geology one is dealing with is crucial for success.

In the past, producers have tried methods as crude as nitroglycerine to fracture tight rocks.

Now producers pump fluid containing sand down a well and into the rock at pressure, which creates small fractures.

These are then held open by the sand particles, allowing the gas to flow.

Robert Merrill, a geologist with 30 years experience in the US petroleum industry, says the process can be an expensive.

In the US, gas prices of $US7 ($A9.09) per thousand cubic feet help make tight gas projects economic.

Mr Merrill said that in Australia, with gas prices at around $3 per thousand cubic feet, tight gas projects are on the border of becoming commercially viable.

"We are probably just about there, but at this price it is not going to generate a lot of activity," he said.

Mr Merril, president of exploration company Catheart Energy and a former divisional president at energy giant Unocal, is working with Victorian company Lakes Oil NL on developing its tenements.

Lakes Oil has tight gas tenements in the onshore Gippsland Basin and has just signed a memorandum of understanding with a subsidiary of Chinese oil giant Sinopec to work towards commercialisation.

Mr Merrill says tight gas production makes a significant contribution to total gas production in the US and is big business.

"About 20 years ago we began trying to exploit these tight gas reservoirs and in the last 10 years it has become a major industry," he says.

The US used up all its normal gas deposits before it began looking at tight gas and other sources, a pattern Mr Merrill says he believes would be repeated worldwide.

"With time, as conventional gas is produced, we will move to the next level of resource," he said.

But investors in Australian tight gas plays have not been rewarded in the past and Fat Prophets resources analyst Gavin Wendt says many remain sceptical.

Mr Wendt says gas prices would need to rise to make Australian tight gas an economic prospect.

But with new conventional offshore gas finds, a growing coal seam methane industry and the possibility of gas being piped down from Papua New Guinea, Mr Wendt says gas supply in Australia looks set to continue to outstrip demand.

"We are looking at an ongoing period of low prices for gas so it all comes down to cost of production," he says.

 

[Smurf1976]

Long term (years) we're on a path to the globalisation of natural gas IMO. So far gas has simply followed the oil industry and I see no reason for that to change. So in due course a "benchmark" global gas price is likely IMO.

To some extent we're already seeing this. Woodside (for example) would be crazy to sell gas domestically for less than (LNG value - liquefaction cost). As the value of LNG rises so too will the value of domestic gas but only when most of the Australian gas resources are committed either domestically or for export. That day is only a few years off IMO.

I thus maintain my view that from an energy policy perspective, gas is only marginally better than oil. Those actively seeking greater reliance on gas for electricity are likely in for a rude shock in the years ahead just as those who diversified into oil in the 1960's found out in the 70's. The world still has plenty of 1960's and 70's built oil-fired power plants that have hardly been used. New Zealand has one that was completed just in time for the 1979 oil crisis that has never been run. We'll see quite a few gas-fired plants like that worldwide in a few years IMO. They just aren't economic at, for example, present US or UK gas prices. Hence there should also be a shift to electricity generation from renewable, coal and nuclear sources.

Before anyone accuses me of being bearish again , I must point out that I'm in fact being BULLISH on the gas price.