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Liquids 'Not-So-Rich' Plays Feeling Some Pain

posted May 30, 2012, 10:09 PM by Jeff Davies
NGL / Oil Ratio approaching late 2008 lows.  Compression of ratio signaling US NGL oversupply.  Producers using oil as a dirty hedge to NGL production watching their hedges not hedge.  Composite NGL barrel below $40.  Still better than $2 dry gas, but a 50/50 dry gas/NGL play getting something like $4.50/Mcfe or $27.25/BOE blended, hardly something to cheer about.  Good for US ethane crackers, bad for US energy industry.