Day one 2017 trading pushed natural gas prices lower to about $3.30 per million BTUs. In spite of this move many analysts remain bullish due to longer range supply and demand factors. On the demand side, natural gas surpassed coal as the number one fuel for power plants. As a result U.S. exports are soaring, erasing stockpiles created due to the shale fracking boom. A cold winter will push demand even higher but prices fell during the first day of the year due to a new forecast of a milder winter season. On the supply side, many shale drillers ceased operations when prices plummeted. The drilling rig count last August was the lowest it has been since 1987. While a few rigs have been placed back in service it will likely not pick up much until gas prices make a substantial gain. The current price does not provide much incentive to increase production. A reduction in natural gas stockpiles signals production should: A.decrease. B.increase. C.remain the same. D.Production is not related to stockpiles.
Day one 2017 trading pushed natural gas prices lower to about $3.30 per million BTUs. In spite of this move many analysts remain bullish due to longer range supply and demand factors. On the demand side, natural gas surpassed coal as the number one fuel for power plants. As a result U.S. exports are soaring, erasing stockpiles created due to the shale fracking boom. A cold winter will push demand even higher but prices fell during the first day of the year due to a new forecast of a milder winter season. On the supply side, many shale drillers ceased operations when prices plummeted. The drilling rig count last August was the lowest it has been since 1987. While a few rigs have been placed back in service it will likely not pick up much until gas prices make a substantial gain. The current price does not provide much incentive to increase production. A reduction in natural gas stockpiles signals production should: A.decrease. B.increase. C.remain the same. D.Production is not related to stockpiles.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Day one 2017 trading pushed natural gas prices lower to about $3.30 per million BTUs. In spite of this move many analysts remain bullish due to longer range supply and demand factors. On the demand side, natural gas surpassed coal as the number one fuel for power plants. As a result U.S. exports are soaring, erasing stockpiles created due to the shale fracking boom. A cold winter will push demand even higher but prices fell during the first day of the year due to a new forecast of a milder winter season.
On the supply side, many shale drillers ceased operations when prices plummeted. The drilling rig count last August was the lowest it has been since 1987. While a few rigs have been placed back in service it will likely not pick up much until gas prices make a substantial gain. The current price does not provide much incentive to increase production.
B.increase.
C.remain the same.
D.Production is not related to stockpiles.
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