“Ponzi Scheme” Keeps US Market Well Supplied

Conjuring up images of the dot-com bubble of the late-1990s, the industry leveled charges of unprofessional journalism against a story by the New York Times claiming shale gas was “just a giant Ponzi scheme.”  Also rejecting the article’s conclusions, traders, instead, are putting more stock in an Energy Information Administration release reporting April US gas production was up 1.1% from March.  According to the EIA, gains from drilling activities in the Haynesville and Marcellus shale helped to boost overall supplies higher.  The EIA report trumped the New York Times story and coupled with cooler weather US prices settled back to levels just above $4.00/MMBtu by month end.  In addition, weak economic data and high unemployment rates in the U.S. did not help to budge gas prices. Download here