OILFIELD EQUIPMENT Pumping up spending to grease the way for petro-profits
Mar 01, 2008 | 01:32 PM
With all three facets of the energy market—upstream, midstream and downstream—currently thriving, some companies servicing the sector are hoping to reap the rewards by pumping up capital expenditures.
Driven by a combination of strong demand, inadequate production and refining capacity and geopolitical risks, the fundamentals supporting higher oil and gas prices are structural and likely will persist for several years, according to Dresser-Rand Group Inc., Houston, a major supplier of rotating equipment for the oil, gas, petrochemical and industrial process industries.
Natural gas prices peaked at $14.994 per million British thermal units (mmBtu) in December 2005, according to data from the U.S. Energy Information Administration (EIA) based on the settlement for the Henry Hub natural gas spot contract on the New York Mercantile Exchange (Nymex).
While current natural gas prices are about 47 percent below that level, they have been showing relatively small but steady gains since last August. Based on actual working days, AMM calculated the natural gas spot price averaged $6.137 per mmBtus in August, rising to $6.189 in September, $7.224 in October and $7.778 in November before easing back to $7.179 in December, but were hovering in the $8-per-mmBtu range in January.....
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