Tuesday, September 27, 2005

Natural gas woes bigger story than crude oil

Having seen his prediction that crude oil prices would reach $65 a barrel become reality, Dr. Michael Economides is making equally bold predictions about natural gas.

Natural gas prices, he said Wednesday while visiting Midland to address the Permian Basin section, Society of Petroleum Engineers, will reach $20 per thousand cubic feet (Mcf) around Christmas.

Having forecast $65 oil, he said, he's now predicting $100 oil "but I'm not impressed with that. Natural gas is the real story."

...All these factors have combined to form what Economides called a "perfect storm -- a double Category 5 perfect storm" to drive prices higher. And next month, he predicted, oil companies will have a major public relations disaster on their hands as they begin reporting historically high third quarter profits that will be "obscene even by our obscene standards."

el - A local energy expert notes that two years ago Economides was on panels pooh-poohing the concept of "peak oil" and a big rise in energy costs. I have previously noted rumors that the price of gasoline is now being surpressed by the gasoline companies who can well afford it to reduce calls for government intervention.

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