Three consecutive below-normal weekly storage withdrawals, lower winter-related weather demand and record high production have been the primary factors behind recent weakness in the natural gas market.
Rumors late last week that daily gas production was coming in 8 Bcf higher than last winter and double pre-winter estimates was the proverbial "nail in the coffin" for natural gas.
The market which was down 4.9% on Friday falling to new 2014 price lows is down another .189 or 5.4% in the overnight session.
Selling in the other energy market particularly crude oil which is trading at a 5 1/2 year low may also be spilling over into the natural gas market.
Current weakness during December is atypical for winter natural gas prices but very similar to the mild winter of 2011-2012 when the spot price fell during winter bottoming out at a 1.902 spot contract low the following April.
While current weakness is weighing negatively on current winter positions in the natural gas market, it is a boon for to adding to longer dated coverage.
Natural gas is again showing surprising price movement during winter. Last winter, the price movement was to the upside topping out at a 6.490 February high.
This winter, the price movement is in the opposite direction. This could turn out to be another memorable winter of trade in the natural gas market.
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