We finally got that press release warning of shut-ins from Chesapeake, and it had the expected impact on price. Feb was up 18.2 cents to $2.525. The market was oversold and the smart money had gone long, so it was the perfect triggering event for a bump up. But as we said a couple of weeks ago in Shut In by Press Release, beware of producers bearing gifts. The economics of shut-in rarely make sense.
Shut-in by Press Release
Thursday, 1/12/2012
Front page article today in the WSJ “Glut Hits Natural Gas Prices”. With front month futures hitting $2.774/MMBtu (lowest front-month price since Sept. 2009, lowest winter since 2002), and Henry Hub cash at $2.808/MMbtu), the non-energy world is finally starting to absorb the magnitude of the shale overhang. Heck, this would have happened in 2010 and 2011 if weather had not saved the day. This year, no weather and no save.