Although we may not see current prices for ever it appears the...

Although we may not see current prices for ever it appears the long term fundamentals are good for gas.

Short term the major drivers of the price are the Iraq situation,Venezuela and a particularly cold winter in the US.

Longer term it appears demand in the US at least is increasing at 2.5%/year compared with supply which is growing at 1.5%. In addition many of the older large wells have just about had their day and any economic growth that occurs will compound the situation.

Also bear in mind that any new electricity production coming on line is powered by natural gas rather than coal,oil etc............ If oil happens to stay high and businesses are forced to switch to gas then this will only compund the situation.

So although the panic buying of gas as a proxy to oil may die down slightly it's going to take a huge ramp up in production and pipeline construction in the US to bring the prices all the way back to those of a couple of years ago. The good thing about Petsec is that they'd still be doing great guns at $2.50! Current price is around the $5.60 mark.