It was a back and forth day in the natural gas market but prices closed generally higher as the 11-14 day forecasts have again turned toward the colder side.
Forecasts which had been negative for prices late last week flip-flopped on Monday leading to a rush of buying on today's open. The early gains were short-lived as the market was back lower by noonday trade.
Storage remains high at 3,297 Bcf which expectations for end of March storage to top the 2,000 Bcf level, the second highest on record for that time of year.
Dry-gas production has remained near the 71.4-71.6 Bcf per day level the past two weeks holding under the 74.3 Bcf high reached in December 2014. With storage expected to remain high, a further production drop could be the factor which finally swings the market back higher in later-2016.
Near term, it would not be surprising to see the market turn back up as weather turns cooler possibly challenging the $2.495/MMBtu spot price high set in early-January. But unless weather turns markedly colder for an extended period of time, rallies should continue to be sold as the mid-December 14-year lows are retested as support over upcoming months.
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