Nat­ur­al gas pipelines com­ing in­to ser­vice by year end may boost de­liv­er­ies from the Mar­cel­lus shale de­posit in the US North­east by 30 per cent, ex­tend­ing a sup­ply glut that helped send prices to decade lows. As much as two bil­lion cu­bic feet of gas a day are set to flow from the lines in Penn­syl­va­nia, Ohio and West Vir­ginia, bound for mar­kets along the East­ern Seaboard, based on gov­ern­ment and pipeline-com­pa­ny pro­jec­tions. About 1,000 Mar­cel­lus shale wells sit un­com­plet­ed, main­ly be­cause of a lack of pipeline in­fra­struc­ture, ac­cord­ing to the En­er­gy De­part­ment.

Jim Chanos, founder and pres­i­dent of Kynikos As­so­ciates Ltd, talks about short-sell­ing op­por­tu­ni­ties, strat­e­gy in tech­nol­o­gy and bank­ing stocks, and the hedge-fund in­dus­try. Gas prices have dropped 60 per­cent since 2007 as pro­duc­ers used tech­niques such as hy­draulic frac­tur­ing, or frack­ing, to reach sup­plies trapped deep in tight lay­ers of shale.

Gas fu­tures tum­bled to US$1.902 per mil­lion British ther­mal units in April, the low­est price since 2002, as stock­piles bal­looned dur­ing a mild win­ter and record US pro­duc­tion. "There are new pipelines com­ing up and more Mar­cel­lus gas is go­ing to flood stor­age go­ing in­to win­ter," Phil Fly­nn, se­nior mar­ket an­a­lyst at Price Fu­tures Group in Chica­go, said in a phone in­ter­view. "Un­less you get a re­al­ly cold win­ter, prices are go­ing to be in the $2 range."

Nat­ur­al gas for Oc­to­ber de­liv­ery rose 9.9 cents, or 3.4 per cent, to set­tle at US$3.023 per mil­lion British ther­mal units on the New York Mer­can­tile Ex­change. Prices have gained 1.1 per cent this year. The fu­tures have av­er­aged US$2.679 since the April low af­ter ris­ing as high as US$3.277. Prices may av­er­age US$3.20 per mil­lion Btu dur­ing the first quar­ter of 2013, when de­mand peaks, based on the me­di­an of 18 an­a­lyst es­ti­mates com­piled by Bloomberg.

Bloomberg