Natural gas prices fluctuated today in a fairly wide .200 intraday trade range but finished the session down a little over two cents on the nearby contracts.
A cold winter blast rallied the market last week higher by nearly 9% from a 31-month price low reached on a combination of short-covering and end-user buying.
Natural gas demand has been increasing as February temperatures across the U.S. have been the 3rd coldest for the month on record. This increased demand has been unable to override record high production in the U.S. and the fact that winter is rapidly winding down.
Storage withdrawals over the upcoming two weeks could come in larger than expected but overall storage at the end of March is expected to fall near the 10-year historical average of 1,565 Bcf.
Market drivers over the upcoming weeks will be storage withdrawals in comparison to pre-report estimates which over the past three weeks have come in lower than expected and weather forecasts.
Production will also need to be closely watched as it has been averaging 12-12.5% above last year's level.
If production remains high with storage being ample, there is little reason not to believe that natural gas prices could again revisit the lower-$2.000/MMBtu level during 2015.
No comments:
Post a Comment