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Long Tailed Fish Swimming East

By Avalon Energy Services | May 6, 2012 |

Markets adjust.  There are perhaps few better examples of that adage than the crude oil and natural gas markets.  One way of looking at how these two markets adjust is through the rotary rig count.  Baker Hughes keeps track of the number of active drilling rigs in the US (and also internationally). Since July 1987,…

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Crude Oil and Natural Gas Move to Different Hemispheres

By Avalon Energy Services | Apr 17, 2012 |

On December 16, 2011, we looked at the relationship between natural gas and crude oil prices (see “Crude Oil and Natural Gas Get a Divorce” here).  We looked at how historically, on an energy equivalent basis ($/mmBtu), crude oil (West Texas Intermediate at Cushing, Oklahoma) traded at about a 50% premium to natural gas at…

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Avalon Energy Services Completes New Energy Supply Contracts on Behalf of Clarion Partners

By Avalon Energy Services | Apr 15, 2012 |

Avalon Energy Services recently completed an electricity procurement process for five properties in Washington, DC owned by Clarion Partners, LLC. Under the new supply contracts, the five buildings will pay 27% less, in aggregate, than what they currently pay under existing contracts.  Avalon Energy Services’ press release related to this was picked up by a…

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Natural Gas Prices Continue to March Down

By Avalon Energy Services | Apr 6, 2012 |

March is the last month of the five month winter heating season.  As of March 30, the level of US working gas in storage was 2,479 BCF.  This is an increase during a time of the year when natural gas is historically withdrawn from storage, not injected.  The March 30 level is 927 BCF, or…

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Energy Prices Always Go Up (continued)

By Avalon Energy Services | Apr 1, 2012 |

As discussed on this blog, there is a common perception that energy prices have been, and continue to be, on a one way path upwards.  In previous posts we focused on natural gas and showed that rather than rising, natural gas prices have, in fact, fallen dramatically, over both the short run and the long…

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OFO (No Room at the Inn)

By Avalon Energy Services | Mar 19, 2012 |

Huh? What does OFO mean? First, a step back. The US natural gas pipeline and distribution system can be thought of as a large container with producers injecting natural gas (supply) and customers withdrawing natural gas (demand).  Last year, during 2011, the US consumed 24.4 trillion cubic feet (TCF ) of natural gas, or, on…

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Liquefied Natural Gas (LNG)

By Avalon Energy Services | Feb 15, 2012 |

The development of a liquefied natural gas export trade was identified in a previous article as an influence that would put upward pressure on natural gas prices. To follow is an overview of where the US liquefied natural gas markets have been and where they may be headed. But first, what is liquefied natural gas?…

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How Low Can They Go?

By Avalon Energy Services | Feb 5, 2012 |

How low can natural gas prices go? We may find out soon. First some background. US natural gas demand varies considerably over the course of a year, driven primarily by natural gas usage related to heating. During peak winter months, natural gas demand exceeds the production capacity of North American natural gas wells. Natural gas…

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Natural Gas Price Drivers

By Avalon Energy Services | Jan 25, 2012 |

We have noted previously on this blog that natural gas prices have declined dramatically over the last three years. On January 19, 2012 the February futures contract settled at $2.32 per million Btus. This is lower than natural gas prices have been in a decade and we are in the winter heating season, a time…

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