DULLES, Va.--()--Natural gas marketers experienced a welcome jump in sales during the second quarter of 2012 with 16 companies, including the top three, BP plc, ConocoPhillips and Shell Energy NA, reporting sales increases compared with 2Q2011, according to the Top North American Gas Marketers Ranking for 2Q2012, compiled by Natural Gas Intelligence (NGI).
“It really doesn't surprise me much, because natural gas prices have been hugely volatile over the past quarter”
Twenty-seven leading gas marketers reported combined sales transactions of 135.86 Bcf/d for 2Q2012, a more than 4% increase (5.68 Bcf/d) from 130.18 Bcf/d in 2Q2011. Note that the NGI survey is of sales transactions, not production, with volumes exchanging hands multiple times. Transactions may include a company's own gas and that of others.
With the glut of natural gas on the market and stubbornly low prices, the higher trading volumes reflected in the survey were to be expected, according to market consultant Rusty Braziel of RBN Energy LLC.
"It really doesn't surprise me much, because natural gas prices have been hugely volatile over the past quarter," Braziel told NGI. "Prices were down below $2 in May and up above $3 in July. On a percentage basis that's a huge swing, and that sort of price volatility tends to attract players who make money off of volatility in prices."
Energy giant BP plc led the surge higher, reporting 23.60 Bcf/d in 2Q2012, an 11% (2.30 Bcf/d) increase from 21.30 Bcf/d in 2Q2011. BP has been the largest marketer by a wide margin since 2003.
ConocoPhillips, the second-ranked company in NGI's survey of the top 27 companies, continued its run of quarterly increases, reporting 16.27 Bcf/d in 2Q2012, up 9% from 14.96 Bcf/d in 2Q2011.
Shell Energy NA, the third-ranked company in the survey, also reported a 9% increase with 13.13 Bcf/d in 2Q2012, compared with 12.00 Bcf/d in 2Q2011.
Following the leaders with trading gains were Macquarie Energy, EDF Trading NA, Tenaska and Louis Dreyfus. The last two gained 10% and 15% respectively.
"Basically what happened this summer is we burned a lot of gas for power generation," Braziel said. "What started off as a summer where we had huge amount of natural gas in inventory, ended up as a summer where at the end of it we have a lot of natural gas in inventory, but no longer huge."
Supply is expected to remain strong and natural gas prices aren't likely to return to the $5 level "for a very long time," according to Braziel, and even a more moderate increase may remain elusive for some time, the time it takes to build up demand.
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Intelligence Press Inc., is an independent publishing company serving the energy industry since 1981 with real-time news and price survey reports for the natural gas market in its publications: Natural Gas Intelligence, Daily Gas Price Index, Weekly Gas Price Index. Its new publication, NGI's Shale Daily at http://shaledaily.com/ is the first daily publication devoted exclusively to the unfolding shale revolution that is rewriting the energy outlook in North America.