natural gas
Sunday, November 30, 2014
Friday, November 28, 2014
Natural Gas Technical Update - Rally Attempt On Wednesday Fails
The January 15 natural gas contract rallied up to a 4.529 high following release of the weekly storage report on Wednesday.
But the buying was short-lived as the market tipped back lower into the close with the January contract settling at 4.355, down .048.
Daily close below the 10 day average on Wednesday turns the near term trend back down. The 10 day average is the first area of resistance today at 4.380 followed by the 200 day average at 4.450.
Longer term “breakout” resistance levels are the 4.633 and 4.689 weekly highs set over the past 3 weeks. A rally above these highs is needed to turn the longer term market trend back up.
Monday’s 4.155 low is the first area of support today followed closely behind by the 40 day moving average at 4.135. Longer term support is the 4.044 low set two weeks ago.
There should be good buying interest at the lower-4.000 level similar to past sell offs in the market.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Collapse - Market Trades To New 4-1/2 Year Price Low
The January 15 crude oil contract has fallen to a new 4-1/2 spot contract low in the overnight session at 67.75.
Prior to recent selling, the contract had been consolidating above support at the lower-73.00 area which now becomes primary resistance in addition to the 10 day moving average currently at 74.50.
The next longer term support levels under the 67.75 overnight low are weekly lows from 2009-2010 at the 64.00-65.00 level. If this support is broken, 58.00-59.00 is the next stop.
Funds were long over 255,000 crude oil contracts according to last Friday’s Commitment of Trader’s report. Not a good way to end the year.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Natural Gas Corner - Market Review - Buying Opportunity
Natural gas prices are weaker this morning with selling coming into the market yesterday during the Thanksgiving holiday computer traded session.
Bearish 6-10 and 8-14 day forecasts are the culprits behind recent weakness as the spot January 14 contract again approaches the lower-4.000 level.
This week's record high November storage withdrawal combined with the potential for plenty of winter heating demand for natural gas down the road should entice buying at the lower-4.000 level similar to the past two weeks.
This is a buying opportunity. A slight change in the forecast and the market will quickly turn around.
Bearish 6-10 and 8-14 day forecasts are the culprits behind recent weakness as the spot January 14 contract again approaches the lower-4.000 level.
This week's record high November storage withdrawal combined with the potential for plenty of winter heating demand for natural gas down the road should entice buying at the lower-4.000 level similar to the past two weeks.
This is a buying opportunity. A slight change in the forecast and the market will quickly turn around.
Thursday, November 27, 2014
Natural Gas Corner - Market Review - Weather Trumps Storage
Natural gas prices remain under pressure as above-normal weather forecasts overshadow a record high storage withdrawal.
Yesterday's early-released EIA storage report showed a 162 Bcf withdrawal tying a record high withdrawal for the month of November. Current gas in storage of 3,432 Bcf is 9.2% below last year's level and 10.4% below the 5-year average.
The spot January 15 contract rallied up to a 4.529 high following release of the report but couldn't hold onto the gain as sellers came in dropping the contract lower into the close. Loses for the day amounted to 072 with the January contract closing at 4.331.
Weather forecasts remain bearish which has led to renewed selling in the overnight market. Trade back toward the lower-4.000 level, if reached, should be well supported by both speculative and end user buying.
Longer term, a winter rally is expected initially back toward the 4.950-5.000 once sustained winter heating demand finally arrives. If winter is colder than expected as some of the private weather forecasters are predicting, trade into the 6.000-8.000 range similar to last winter cannot be ruled out.
The hedge funds have been clobbered in the crude oil market and are going to need a market to help recoup losses ahead of the end of the year. Natural gas could be the market they target as it is the most volatile commodity on the board.
Recent volatility is likely a sign of further things to come. With storage below previous years' levels, the potential for a strong winter rally remains high.
Yesterday's early-released EIA storage report showed a 162 Bcf withdrawal tying a record high withdrawal for the month of November. Current gas in storage of 3,432 Bcf is 9.2% below last year's level and 10.4% below the 5-year average.
The spot January 15 contract rallied up to a 4.529 high following release of the report but couldn't hold onto the gain as sellers came in dropping the contract lower into the close. Loses for the day amounted to 072 with the January contract closing at 4.331.
Weather forecasts remain bearish which has led to renewed selling in the overnight market. Trade back toward the lower-4.000 level, if reached, should be well supported by both speculative and end user buying.
Longer term, a winter rally is expected initially back toward the 4.950-5.000 once sustained winter heating demand finally arrives. If winter is colder than expected as some of the private weather forecasters are predicting, trade into the 6.000-8.000 range similar to last winter cannot be ruled out.
The hedge funds have been clobbered in the crude oil market and are going to need a market to help recoup losses ahead of the end of the year. Natural gas could be the market they target as it is the most volatile commodity on the board.
Recent volatility is likely a sign of further things to come. With storage below previous years' levels, the potential for a strong winter rally remains high.
Wednesday, November 26, 2014
EIA Natural Gas Storage Report - 162 BCF Withdrawal - Record High For November
For the week ended
November 21:
EIA Withdrawal - 162 BCF
Last Year's Draw - 17 BCF
5 Yr Avg Draw - 6 BCF
Range of Estimates - 111 BCF to 168 BCF
Avg Estimate - 149 BCF
Total Gas in Storage - 3.432 TCF
EIA Withdrawal - 162 BCF
Last Year's Draw - 17 BCF
5 Yr Avg Draw - 6 BCF
Range of Estimates - 111 BCF to 168 BCF
Avg Estimate - 149 BCF
Total Gas in Storage - 3.432 TCF
Dow Jones - Natural Gas Commentary
DJ Natural Gas Futures Rebound on Expected Stockpile Decline
By Timothy Puko
NEW YORK--Natural gas futures rebounded Wednesday as traders prepared for news of a big drain on stockpiles.
Natural gas for January delivery rose 1.3 cents, or 0.3%, to $4.416 a million British thermal units on the New York
Mercantile Exchange.
The U.S. Energy Information Agency is likely to report Wednesday that high demand from last week's cold drained gas
stockpiles by 149 billion cubic feet, according to the Wall Street Journal survey of analysts and brokers. That would
be a 25-fold increase on the week's five-year average drain and it would be the second-largest drain for a week in
November in EIA records that date back through 1994.
The EIA is scheduled to release its storage data at noon EST. It is making an advanced release because of the
Thanksgiving holiday.
Weather forecasts have grown warmer this week, meaning demand for home heating is likely to drop. That would usually
bring prices down, if not for traders anticipating Wednesday's announcement for a big stockpile drain, Teri Viswanath,
a natural-gas strategist at BNP Paribas SA in New York, said in a note.
"The fact that futures remain reasonably well supported ... is relatively remarkable," she said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.24/mmBtu, compared with Tuesday's
range of $4.10-$4.165. Cash prices at the Transco Z6 hub in New York last traded at $4.05/mmBtu, compared with
Tuesday's range of $3.95 to $4.45.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 26, 2014 10:15 ET (15:15 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112614 15:15 -- GMT
------
By Timothy Puko
NEW YORK--Natural gas futures rebounded Wednesday as traders prepared for news of a big drain on stockpiles.
Natural gas for January delivery rose 1.3 cents, or 0.3%, to $4.416 a million British thermal units on the New York
Mercantile Exchange.
The U.S. Energy Information Agency is likely to report Wednesday that high demand from last week's cold drained gas
stockpiles by 149 billion cubic feet, according to the Wall Street Journal survey of analysts and brokers. That would
be a 25-fold increase on the week's five-year average drain and it would be the second-largest drain for a week in
November in EIA records that date back through 1994.
The EIA is scheduled to release its storage data at noon EST. It is making an advanced release because of the
Thanksgiving holiday.
Weather forecasts have grown warmer this week, meaning demand for home heating is likely to drop. That would usually
bring prices down, if not for traders anticipating Wednesday's announcement for a big stockpile drain, Teri Viswanath,
a natural-gas strategist at BNP Paribas SA in New York, said in a note.
"The fact that futures remain reasonably well supported ... is relatively remarkable," she said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.24/mmBtu, compared with Tuesday's
range of $4.10-$4.165. Cash prices at the Transco Z6 hub in New York last traded at $4.05/mmBtu, compared with
Tuesday's range of $3.95 to $4.45.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 26, 2014 10:15 ET (15:15 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112614 15:15 -- GMT
------
Natural Gas Technical Update - Market Showing Continued Strength Ahead Of EIA Storage Report
The new front month January 15 natural gas contract rallied back higher in Tuesday’s session completely closing the gap created on Monday’s lower open.
The January contract bottomed out at a 4.155 in early trade on Monday but closed nearly .150 above this low. In yesterday’s session, the contract gained another .099 settling at 4.403. The gap between 4.314-4.390 was also closed.
The January contract remains in a fairly wide and very choppy trading range between 4.040-4.150 support and the 4.633-4.689 weekly highs as resistance.
The market is slightly higher in overnight trade with the 200 day moving average at 4.450 holding as overnight resistance with longer term resistance at the weekly highs.
The 10 day moving average at 4.370 is the first area of support today with longer term support at the 40 day moving average at 4.130 which coincides with Monday’s 4.155 low.
The longer term trend for the market remains sideways to higher into the early-months of 2015. A breakout above 4.633-4.689 weekly high resistance is expected at some point in upcoming trade.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
Crude Oil Technical Update - Bears Back In Control - How Low Can It Go?
A small uptick in the crude oil market earlier in the week was quickly sold back down as the down trend resumes.
The January 15 crude oil contract lost 1.69 (2.2%) in Tuesday’s trade settling at 74.09.
Selling has continued overnight dropping the contract toward the 4-year price low set two weeks ago at the 73.22. If this support is broken, the next support areas from the weekly chart are at 69.50-70.50 and 64.00-65.00.
The 10 day moving average is the first area of resistance today at 75.05 followed by the 77.83 high set on Monday.
Bottom line – Bears back in control. How low can it go?
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index- Bearish
Short Term Trend Following Index - Bullish
Tuesday, November 25, 2014
Natural Gas Corner - Market Review - All Of Monday's Losses Erased
After falling over 6% on Monday's open, today's expiring December 14 natural gas contract clawed slowly back higher. By today's close, all of Monday's losses plus some had been recouped as the December contract closed at a 4.282 expiration price.
Near term weather forecasts over the next 3-4 days have moderated for the southern part of the U.S. But the forecast in the northern part of the country particularly in the Northeast which experienced a sharp price run up last winter is expected to be cold with a heavy snow events.
This has helped temper the longer range forecasts which have turned markedly bearish during the week. Today's latest 6-10 and 8-14 day forecasts remains negative for natural gas prices if correct.
Tomorrow's weekly storage report which is being released a day early due to the Thanksgiving holiday could show a record high withdrawal for mid-November. A Bloomberg survey had a range of between 131-162 Bcf with an average withdrawal of 150 Bcf. The record high withdrawal for November was148 Bcf in 2000.
With the December contract expiration complete and many traders heading out for Thanksgiving, tomorrow should be quiet. The wildcard is the EIA report which could have a dramatic affect on prices if liquidity should fall.
In 2004, the expiring December 04 contract rallied from a 6.600 daily low to a 7.976 closing price over the last 30 minutes of trade, an increased of $13,760 per contract. This occurred on the day before Thanksgiving.
Price dips toward the 3.900-4.000 level should be bought with a breakout above 4.450-4.550 weekly chart highs needed to turn the longer term market trend back up.
Happy Thanksgiving.
Near term weather forecasts over the next 3-4 days have moderated for the southern part of the U.S. But the forecast in the northern part of the country particularly in the Northeast which experienced a sharp price run up last winter is expected to be cold with a heavy snow events.
This has helped temper the longer range forecasts which have turned markedly bearish during the week. Today's latest 6-10 and 8-14 day forecasts remains negative for natural gas prices if correct.
Tomorrow's weekly storage report which is being released a day early due to the Thanksgiving holiday could show a record high withdrawal for mid-November. A Bloomberg survey had a range of between 131-162 Bcf with an average withdrawal of 150 Bcf. The record high withdrawal for November was148 Bcf in 2000.
With the December contract expiration complete and many traders heading out for Thanksgiving, tomorrow should be quiet. The wildcard is the EIA report which could have a dramatic affect on prices if liquidity should fall.
In 2004, the expiring December 04 contract rallied from a 6.600 daily low to a 7.976 closing price over the last 30 minutes of trade, an increased of $13,760 per contract. This occurred on the day before Thanksgiving.
Price dips toward the 3.900-4.000 level should be bought with a breakout above 4.450-4.550 weekly chart highs needed to turn the longer term market trend back up.
Happy Thanksgiving.
EIA Natural Gas Storage Estimates - Huge Withdrawal Expected Tomorrow
DJ Analysts See 149-Billion-Cubic-Feet Drop in U.S. Natural Gas Inventories
By Timothy Puko
Analysts and traders expect government data scheduled for release Thursday to show natural gas inventories shrunk by
25 times as much as they usually do this time of year.
The U.S. Energy Information Administration is expected to report that storage levels declined by 149 billion cubic
feet of gas during the week ended Nov. 21, according to the average forecast of 14 analysts and traders surveyed by The
Wall Street Journal.
The EIA is scheduled to release its storage data for the week on Wednesday at noon EDT. It is giving an advanced
release because of the Thanksgiving holiday.
For the Nov. 21 week, the median estimate is for a drop of 155.5 bcf. Estimates range from a decline of 111 bcf to a
decline of 168 bcf.
The estimate for Nov. 21 is more than the 17 bcf drained from storage for the same week last year and the 6-bcf
five-year average injection for that week.
If the storage estimate is correct, inventories as of Nov. 21 totaled 3.5 trillion cubic feet, 8.4% below levels from
a year ago and 9.7% below the five-year average for the same week.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 25, 2014 13:07 ET (18:07 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112514 18:07 -- GMT
------
By Timothy Puko
Analysts and traders expect government data scheduled for release Thursday to show natural gas inventories shrunk by
25 times as much as they usually do this time of year.
The U.S. Energy Information Administration is expected to report that storage levels declined by 149 billion cubic
feet of gas during the week ended Nov. 21, according to the average forecast of 14 analysts and traders surveyed by The
Wall Street Journal.
The EIA is scheduled to release its storage data for the week on Wednesday at noon EDT. It is giving an advanced
release because of the Thanksgiving holiday.
For the Nov. 21 week, the median estimate is for a drop of 155.5 bcf. Estimates range from a decline of 111 bcf to a
decline of 168 bcf.
The estimate for Nov. 21 is more than the 17 bcf drained from storage for the same week last year and the 6-bcf
five-year average injection for that week.
If the storage estimate is correct, inventories as of Nov. 21 totaled 3.5 trillion cubic feet, 8.4% below levels from
a year ago and 9.7% below the five-year average for the same week.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 25, 2014 13:07 ET (18:07 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112514 18:07 -- GMT
------
Dow Jones - End of Day Commentary
DJ Natural Gas Rebounds on Cool Forecast, Expiring Contract
By Timothy Puko
Natural gas closed higher as a cooler afternoon weather update pushed the December contract on one last rally before
it expired.
The front-month contract settled up 13.1 cents, or 3.2%, at $4.282 a million British thermal units on the New York
Mercantile Exchange. December futures ended a volatile month on a volatile note. The contract moved by more than 2%, up
or down, in all but three of its last 21 sessions.
Most trading volume has moved to the January contract. It also settled higher, up 9.9 cents, or 2.3%, at
$4.403/mmBtu.
The rally picked up in the afternoon as weather updates showed cooler temperatures than previous forecasts. Half of
U.S. homes use natural gas for heating, and the market had spent the morning in retreat as traders expected demand to
start falling from unseasonably warm weather.
"The model message is while it's warmer (outside of the West), it's really just relative to how cold November was,"
WeatherBELL Analytics LLC said in its afternoon update.
This month has been on pace to be one of the coldest Novembers with some of the highest demand for gas heating in
recent history, according to analysts. That had boosted the market earlier this month and helped end a two-session skid
when analysts on Tuesday made lofty projections for this week's gas stockpile update.
They expect the U.S. Energy Information Agency to report tomorrow that high demand from last week's cold drained
stockpiles by 149 billion cubic feet. That would be a 25-fold increase on the week's five-year average drain and it
would be the second-largest drain for a week in November in EIA records that date back through 1994.
That encouraged traders to bid up the market Tuesday, said Gene McGillian, an analyst at Tradition Energy. The EIA is
scheduled to release its storage data for the week on Wednesday at noon EST. It is making an advance release because of
the Thanksgiving holiday.
The contract expiration encouraged buyers to step in, said Michael Doyle, a broker at Eclipse International Inc. in
New York. Many investors had bet against prices earlier this month, expecting strong supply would cause prices to fall.
For those short-sellers holding December contracts, this was their last chance to buy back in to close out those bets,
Mr. Doyle said.
Warmer weather on the way could still make those expectations for falling prices come through very soon, Mr.
McGillian said. But the weather has been so volatile, and so many traders are adamant about cold weather and high
demand, that it's created an uncertain market despite reliable supply, Mr. Doyle said.
"I've got a guy shouting 'Vortex! Vortex! Vortex!' He loves throwing that around," Mr. Doyle said, referring to last
year's "polar vortex" weather phenomenon that caused record cold and $6 natural-gas prices. "It could go anywhere from
here."
FUTURES SETTLEMENT NET CHANGE
Nymex December $4.282 13.1c
Nymex January $4.403 9.9c
Nymex February $4.377 9.6c
CASH HUB RANGE PREVIOUS DAY
El Paso Perm $4.03-$4.09 $4.10-$4.17
El Paso SJ $4.04-$4.09 $4.06-$4.17
Henry Hub $4.10-$4.165 $4.04-$4.13
Katy $4.03-$4.06 $4.05-$4.15
SoCal $4.19-$4.35 $4.25-$4.34
Tex East M3 $3.56-$3.90 $3.24-$3.65
Transco 65 $4.07-$4.14 $4.055-$4.0950
Transco Z6 $3.95-$4.45 $3.28-$3.45
Waha $4.03-$4.07 $3.97-$4.10
--Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 25, 2014 15:59 ET (20:59 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112514 20:59 -- GMT
------
By Timothy Puko
Natural gas closed higher as a cooler afternoon weather update pushed the December contract on one last rally before
it expired.
The front-month contract settled up 13.1 cents, or 3.2%, at $4.282 a million British thermal units on the New York
Mercantile Exchange. December futures ended a volatile month on a volatile note. The contract moved by more than 2%, up
or down, in all but three of its last 21 sessions.
Most trading volume has moved to the January contract. It also settled higher, up 9.9 cents, or 2.3%, at
$4.403/mmBtu.
The rally picked up in the afternoon as weather updates showed cooler temperatures than previous forecasts. Half of
U.S. homes use natural gas for heating, and the market had spent the morning in retreat as traders expected demand to
start falling from unseasonably warm weather.
"The model message is while it's warmer (outside of the West), it's really just relative to how cold November was,"
WeatherBELL Analytics LLC said in its afternoon update.
This month has been on pace to be one of the coldest Novembers with some of the highest demand for gas heating in
recent history, according to analysts. That had boosted the market earlier this month and helped end a two-session skid
when analysts on Tuesday made lofty projections for this week's gas stockpile update.
They expect the U.S. Energy Information Agency to report tomorrow that high demand from last week's cold drained
stockpiles by 149 billion cubic feet. That would be a 25-fold increase on the week's five-year average drain and it
would be the second-largest drain for a week in November in EIA records that date back through 1994.
That encouraged traders to bid up the market Tuesday, said Gene McGillian, an analyst at Tradition Energy. The EIA is
scheduled to release its storage data for the week on Wednesday at noon EST. It is making an advance release because of
the Thanksgiving holiday.
The contract expiration encouraged buyers to step in, said Michael Doyle, a broker at Eclipse International Inc. in
New York. Many investors had bet against prices earlier this month, expecting strong supply would cause prices to fall.
For those short-sellers holding December contracts, this was their last chance to buy back in to close out those bets,
Mr. Doyle said.
Warmer weather on the way could still make those expectations for falling prices come through very soon, Mr.
McGillian said. But the weather has been so volatile, and so many traders are adamant about cold weather and high
demand, that it's created an uncertain market despite reliable supply, Mr. Doyle said.
"I've got a guy shouting 'Vortex! Vortex! Vortex!' He loves throwing that around," Mr. Doyle said, referring to last
year's "polar vortex" weather phenomenon that caused record cold and $6 natural-gas prices. "It could go anywhere from
here."
FUTURES SETTLEMENT NET CHANGE
Nymex December $4.282 13.1c
Nymex January $4.403 9.9c
Nymex February $4.377 9.6c
CASH HUB RANGE PREVIOUS DAY
El Paso Perm $4.03-$4.09 $4.10-$4.17
El Paso SJ $4.04-$4.09 $4.06-$4.17
Henry Hub $4.10-$4.165 $4.04-$4.13
Katy $4.03-$4.06 $4.05-$4.15
SoCal $4.19-$4.35 $4.25-$4.34
Tex East M3 $3.56-$3.90 $3.24-$3.65
Transco 65 $4.07-$4.14 $4.055-$4.0950
Transco Z6 $3.95-$4.45 $3.28-$3.45
Waha $4.03-$4.07 $3.97-$4.10
--Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 25, 2014 15:59 ET (20:59 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112514 20:59 -- GMT
------
Dow Jones - Morning Natural Gas Commentary
DJ Natural Gas Retreat Continues as Weather Forecasts Warm
By Timothy Puko
NEW YORK--Natural gas prices are falling for a third straight session as weather forecasts for late November and
early December suggest unseasonably weak demand for gas heating.
Natural gas for December delivery is down 3 cents, or 0.7%, at $4.121 a million British thermal units on the New York
Mercantile Exchange. The front-month contract has now declined 8.4% since Thursday's close.
Options on the December contract expired Monday, and the December futures contract settles Tuesday. Most trading
volume has moved to the January contract, which is down 4.6 cents, or 1.1%, at $4.258/mmBtu.
Temperatures as much as 5 to 8 degrees Fahrenheit above normal are likely to extend farther north than expected
yesterday, reaching big markets including Washington, Philadelphia and New York, according to Commodity Weather Group.
Half of all U.S. homes use natural gas for home heating, and above-normal temperatures in December are likely to lead
to unseasonably low demand.
Prices might have dropped even lower, but the large demand from last week, the contract expiration and Thanksgiving
are tempering any selloff, said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York.
Traders often don't like to open trades before the market closes for an extended period or before the Energy
Information Administration gives its weekly update on storage levels. EIA is moving up that update to noon Wednesday,
nearly 24 hours earlier than normal because of the holiday.
"You're going to get some choppy movements today," Mr. Clements said. "Nothing is going to be smooth. A lot of people
are going to be sitting on their hands before the holiday."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.155/mmBtu, compared with Monday's
range of $4.04-$4.13. Cash prices at the Transco Z6 hub in New York last traded at $4.10/mmBtu, compared with Monday's
range of $3.28 to $3.45.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 25, 2014 09:46 ET (14:46 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112514 14:46 -- GMT
------
By Timothy Puko
NEW YORK--Natural gas prices are falling for a third straight session as weather forecasts for late November and
early December suggest unseasonably weak demand for gas heating.
Natural gas for December delivery is down 3 cents, or 0.7%, at $4.121 a million British thermal units on the New York
Mercantile Exchange. The front-month contract has now declined 8.4% since Thursday's close.
Options on the December contract expired Monday, and the December futures contract settles Tuesday. Most trading
volume has moved to the January contract, which is down 4.6 cents, or 1.1%, at $4.258/mmBtu.
Temperatures as much as 5 to 8 degrees Fahrenheit above normal are likely to extend farther north than expected
yesterday, reaching big markets including Washington, Philadelphia and New York, according to Commodity Weather Group.
Half of all U.S. homes use natural gas for home heating, and above-normal temperatures in December are likely to lead
to unseasonably low demand.
Prices might have dropped even lower, but the large demand from last week, the contract expiration and Thanksgiving
are tempering any selloff, said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York.
Traders often don't like to open trades before the market closes for an extended period or before the Energy
Information Administration gives its weekly update on storage levels. EIA is moving up that update to noon Wednesday,
nearly 24 hours earlier than normal because of the holiday.
"You're going to get some choppy movements today," Mr. Clements said. "Nothing is going to be smooth. A lot of people
are going to be sitting on their hands before the holiday."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.155/mmBtu, compared with Monday's
range of $4.04-$4.13. Cash prices at the Transco Z6 hub in New York last traded at $4.10/mmBtu, compared with Monday's
range of $3.28 to $3.45.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 25, 2014 09:46 ET (14:46 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112514 14:46 -- GMT
------
Natural Gas Technical Update - Technical Picture Weakening
Today’s expiring December 14 natural gas contract at one point on Monday was down over 6% bottoming out at a 4.006 morning low. But as the day progressed, the contract was able to recoup over half the morning losses settling the day at 4.151, down .115 (2.7%).
The primary trend remains sideways to higher although a drop back into the 3.900-4.000 level near term cannot be ruled out. Once a low does form, a retest of 4.450-4.550 weekly high resistance is expected.
The gap created on yesterday’s open was nearly closed overnight with the top of the gap being 4.233 and a current 4.195 daily high. There should be strong resistance at the lower 4.200 area including the 10 day moving average at 4.215 today.
The 4.100-4.110 area is the first level of support today followed by yesterday’s 4.006 low which coincides with the 40 day moving average at 4.025.
Trade could be volatile again today with the December contract expiring with many traders heading out for the Thanksgiving Holiday.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Is The Market Bottoming?
A breakout above 10 day moving average resistance on Friday by the January 15 crude oil contract was followed by a sell off back lower in Monday’s trade.
But while the January contract lost .78 (1%) settling at 75.78, it closed above the 10 day moving average for a second day which could be the beginning of a market low.
With 10 day moving average support holding on Monday, the near term trend remains up with Monday’s 77.02 high being the first area of resistance followed by last Friday’s 77.83 high extending up to 78.64.
A breakout above 78.64 would turn 80.00 into the next upside resistance which coincides with the 40 day moving average at 80.50. A rally above the 40 day average is needed to turn the longer term trend back higher.
A drop back under the 10 day moving average at 75.60 today would turn the near term trend back down with following support at 75.00 and the 73.22 low set two weeks ago.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
Monday, November 24, 2014
Natural Gas Corner - Market Review - Monday Morning Smackdown
The December 14 at one point was down over 6% in today's trade gapping lower on Sunday night's open.
The reason for the weakness was simple, the weather forecasts changed. Last week's below-normal forecasts completely changed this week as above-normal temperatures are now expected across much of the U.S. in the latest National Weather Service 6-10 and 8-14 day forecasts.
The one positive note for the bulls today was that the December contract closed down only .115 settling nearly .150 above the early morning low.
Weakness in the market should be bought as there is plenty of winter ahead for a potential spike in heating demand. The winter 13-14 rally didn't really pick up steam until early-January so weakness on moderating temperatures should be expected.
The funds have been noticeably absent from the market only lightly adding to long positions over the past two weeks. The current speculative long position in the market was estimated at 147,520 contracts, up 1,936 according to the Commitment of Trader's Report released on Friday. This is well below the record high long position of 488,901 contracts reached last February.
A price drop under 4.000 two weeks ago quickly reversed back higher. Similarly in today's trade, the market bottomed out just above the 4.000 level as traders buy into market weakness between 3.900-4.000.
The biggest risk in the market at this point lies to the upside. Weakness may continue ahead of the holiday week but new prices lows during November regardless of bearish weather forecasts remains unlikely.
Technically, the market stall last week for a second time at 4.450-4.550 weekly high resistance. A breakout above this level which is expected sometime this winter would turn 4.980-5.000 into the next upside objective.
As stated many times before, recent volatility is likely the beginning of a turbulent rally winter ahead.
The reason for the weakness was simple, the weather forecasts changed. Last week's below-normal forecasts completely changed this week as above-normal temperatures are now expected across much of the U.S. in the latest National Weather Service 6-10 and 8-14 day forecasts.
The one positive note for the bulls today was that the December contract closed down only .115 settling nearly .150 above the early morning low.
Weakness in the market should be bought as there is plenty of winter ahead for a potential spike in heating demand. The winter 13-14 rally didn't really pick up steam until early-January so weakness on moderating temperatures should be expected.
The funds have been noticeably absent from the market only lightly adding to long positions over the past two weeks. The current speculative long position in the market was estimated at 147,520 contracts, up 1,936 according to the Commitment of Trader's Report released on Friday. This is well below the record high long position of 488,901 contracts reached last February.
A price drop under 4.000 two weeks ago quickly reversed back higher. Similarly in today's trade, the market bottomed out just above the 4.000 level as traders buy into market weakness between 3.900-4.000.
The biggest risk in the market at this point lies to the upside. Weakness may continue ahead of the holiday week but new prices lows during November regardless of bearish weather forecasts remains unlikely.
Technically, the market stall last week for a second time at 4.450-4.550 weekly high resistance. A breakout above this level which is expected sometime this winter would turn 4.980-5.000 into the next upside objective.
As stated many times before, recent volatility is likely the beginning of a turbulent rally winter ahead.
Latest 6-10 and 8-14 Day NWS Forecasts - The Reason For Today's Sell Off
A complete flip-flop from last week's below-normal forecasts.
Key Resistance Holds In Last Week's Natural Gas Trade
For a second time in the past 2 weeks, a rally by the December 14 natural gas contract has stalled at 4.450-4.500 resistance.
The contract has briefly moved above 4.500 topping out at a
4.544 high two weeks ago and a 4.532 high last week. But the highest
price level the December contract has closed at over the past 2 weeks was 4.489
last Thursday.
The inability to rally above resistance last week has led to
a gap lower open in today’s trade as the market has fallen back toward the
lower-4.000 level.
Selling two weeks ago in the December contract bottomed out
at a 3.931 low before reversing back higher. A drop back under the
4.000 level should find good buying interest as the trend for the market is now
sideways to higher into the early months of 2015.
Dow Jones - Morning Natural Gas Commentary
DJ Natural Gas Extends Selloff as Weather Warms Up
By Christian Berthelsen
Natural-gas futures extended a slide from last week as temperature forecasts rose and expectations for gas-fired
heating demand fell.
Natural gas for December delivery fell 22 cents, or 5.2%, to $4.046 a million British thermal units on the New
York Mercantile Exchange.
With the December contract expiring this week, most of the volume in the market has moved forward into the January
contract, which was down 20 cents, or 4.5%, to $4.2170 a million Btus.
Traders bid up the market last week as the first appearance of cold weather signaled the start of the heating
season, but the market began to fall back as the outlook moderated. The December contract fell 22.3 cents on Friday,
and the selloff continued Monday as the weather outlook continued to warm up.
"As the weather turns unseasonably warm once again, the spot natural gas futures contract has been turning south,"
Energy Management Institute analyst Dominick Chirichella said in a note.
Commodity Weather Group said Monday's forecast marked the biggest warming revision of the heating season thus far.
The group said a band of above-normal temperatures would cover much of the Deep South beginning Nov. 29 with some
temperatures in the 70s, and that much-above-normal temperatures would dominate the Eastern Seaboard with highs in the
60s through the first week of December.
The U.S. Energy Information Administration reported last week that the amount of gas in storage declined 17
billion cubic feet in the first net withdrawal of the heating season. Stockpiles stood at 3.59 trillion cubic feet as
of Nov. 14, 6.4% below average levels. The gas market has experienced huge swings in recent weeks in reaction to
forecast revisions, as traders speculate whether supplies will be adequate to meet demand through fall and winter.
In physical markets, cash prices for next-day delivery of natural gas at the benchmark Henry Hub in Louisiana last
traded at $4.05 a million Btus, below Friday's range of $4.29 to $4.35.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 24, 2014 09:13 ET (14:13 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112414 14:13 -- GMT
------
By Christian Berthelsen
Natural-gas futures extended a slide from last week as temperature forecasts rose and expectations for gas-fired
heating demand fell.
Natural gas for December delivery fell 22 cents, or 5.2%, to $4.046 a million British thermal units on the New
York Mercantile Exchange.
With the December contract expiring this week, most of the volume in the market has moved forward into the January
contract, which was down 20 cents, or 4.5%, to $4.2170 a million Btus.
Traders bid up the market last week as the first appearance of cold weather signaled the start of the heating
season, but the market began to fall back as the outlook moderated. The December contract fell 22.3 cents on Friday,
and the selloff continued Monday as the weather outlook continued to warm up.
"As the weather turns unseasonably warm once again, the spot natural gas futures contract has been turning south,"
Energy Management Institute analyst Dominick Chirichella said in a note.
Commodity Weather Group said Monday's forecast marked the biggest warming revision of the heating season thus far.
The group said a band of above-normal temperatures would cover much of the Deep South beginning Nov. 29 with some
temperatures in the 70s, and that much-above-normal temperatures would dominate the Eastern Seaboard with highs in the
60s through the first week of December.
The U.S. Energy Information Administration reported last week that the amount of gas in storage declined 17
billion cubic feet in the first net withdrawal of the heating season. Stockpiles stood at 3.59 trillion cubic feet as
of Nov. 14, 6.4% below average levels. The gas market has experienced huge swings in recent weeks in reaction to
forecast revisions, as traders speculate whether supplies will be adequate to meet demand through fall and winter.
In physical markets, cash prices for next-day delivery of natural gas at the benchmark Henry Hub in Louisiana last
traded at $4.05 a million Btus, below Friday's range of $4.29 to $4.35.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 24, 2014 09:13 ET (14:13 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112414 14:13 -- GMT
------
Natural Gas Technical Update - Gap Lower Open - All Of Last Week's Gains Erased Overnight
Natural gas prices rallied up to a 4-month price high in early trade last Friday but fell sharply lower into the close ending another volatile week in the market.
The December 14 contract began last week’s trade with a gap higher open on Monday gaining nearly 8% for the day. Buying continued into Friday’s open as the contract topped out at a 4.532 morning high. The market could not, however, breakout above 4.544 weekly high resistance set two weeks ago which reversed prices back lower into Friday’s close.
The December contract ended the week at 4.266, well below Friday’s intraday high, but still up .246 or 6.1% for the 5 days of trade.
All of last week’s gains have been erased overnight as the December contract is trading back near the lower-4.000 level in overnight trade.
The current low of 4.006 is the first area of support today which is near the 40 day moving average at 4.025. Longer term support is the low set two weeks ago at 3.931.
The 4.076 overnight high is the first area of resistance followed by the top of the open gap at 4.233 which coincides with the 10 day moving average at 4.220.
The market has fallen back lower today after failing to clear 4.450-4.500 resistance in last week’s trade. The seasonal trend for the market suggests weakness should be bought.
The funds have remained largely on the sidelines over the past 3 weeks as the market has entered into a volatile period of trade. Friday’s Commitment of Trader’s report showed the funds long 147,520 natural gas contracts, up 1,936 from the previous week.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
Crude Oil Technical Update - First Higher Weekly Close In Two Months On Friday
The January 15 crude oil contract closed above the 10 day moving average on Friday for only the second time since late-September. The last time this resistance was broken, the market quickly reversed back lower.
In Friday’s trade, the January contract gained .66 closing up for a second day to settle at 76.51. Last week was the first higher weekly close in the past 2 months.
There has been no follow through selling overnight suggesting last week’s breakout will fail. The 10 day moving average at 75.80 today now becomes primary support. A drop back under this average will turn the near term trend back down with the 73.22 contract low being the next level of support.
Friday’s 77.83 high is the first area of resistance this week extending up to 78.64 which was a previous daily low from October. Longer term resistance is the 40 day moving average currently at 80.85.
The funds have been liquidation existing long positions in the crude oil market as it has fallen to a new 4-year low. Friday’s Commitment of Trader’s report showed the funds long 255,363 contracts, down 21,469 from the previous week. The funds were record long 458,969 contracts last June at the market topped for the year.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Natural Gas Market Seasonal Price Trend Update - Buy Weakness In The Market
The seasonal price trend for the natural gas market suggests that weakness in the market should be bought.
Recent trade in natural gas prices shows this will be a very difficult market to attempt to trade this winter due to near constant volatility and a very choppy underlying trend.
The seasonal price trend chart over the past 3 and 5 years shows a sideways to higher trend for prices into the early months of 2015.
Bottom line - Buy weakness in the market and close your eyes. It is going to be a rough ride this winter.
Recent trade in natural gas prices shows this will be a very difficult market to attempt to trade this winter due to near constant volatility and a very choppy underlying trend.
The seasonal price trend chart over the past 3 and 5 years shows a sideways to higher trend for prices into the early months of 2015.
Bottom line - Buy weakness in the market and close your eyes. It is going to be a rough ride this winter.
Hedge Funds Sitting On The Sidelines This Winter
The hedge funds have remained surprisingly inactive over the past three weeks in the natural gas market which has experienced one of the most volatile starts to winter in history.
It might be that the funds over the past 2 years have "topped ticked" the market accumulating a record high speculative long position the very week the market topped.
Funds were record long 488,901 natural gas contracts on the February 2014 high. As the market fell to a new low for 2014, the fund long position fell as low as 141,371 contracts two weeks ago.
The funds have been much more timid this year in attempting to play the winter price rally. But over the past two weeks, fund have been lightly buying the market.
Friday's Commitment of Trader's report showed the funds long 147,520 contracts, up 1,936 from the previous week.
Overnight volatility in the natural gas market may be one primary reason the funds have been largely sitting on the sidelines this winter - no lasting trend and way too choppy to trade.
It might be that the funds over the past 2 years have "topped ticked" the market accumulating a record high speculative long position the very week the market topped.
Funds were record long 488,901 natural gas contracts on the February 2014 high. As the market fell to a new low for 2014, the fund long position fell as low as 141,371 contracts two weeks ago.
The funds have been much more timid this year in attempting to play the winter price rally. But over the past two weeks, fund have been lightly buying the market.
Friday's Commitment of Trader's report showed the funds long 147,520 contracts, up 1,936 from the previous week.
Overnight volatility in the natural gas market may be one primary reason the funds have been largely sitting on the sidelines this winter - no lasting trend and way too choppy to trade.
Friday, November 21, 2014
Natural Gas Technical Update - Big Sell Off Overnight From Weekly High Resistance
A late day rally on Thursday saved what initially looked be a big down day for the December 14 contract.
After rallying up to a new daily high of 4.503 following release of the weekly storage report, the December contract was soon selling back lower as weekly high resistance held near the daily high.
The contract sold down to the 10 day moving average support bottoming out at a 4.250 low with one hour to go in the session. Over the next hour, the December contract rallied up to a 4.489 closing price gaining .118 or 2.7% on the day.
The bulls may have saved the day on Thursday but the bears are back in control in early trade today dropping the market sharply lower.
The December contract rallied up to a 4.533 overnight high but was unable to breakout above 4.544 weekly high resistance. Selling overnight has dropped the contract back toward 10 day moving average support which is at 4.245 today.
If this support is broken, the gap area created on Monday’s open between 4.074-4.113 will become the next downside support. Longer term supports are the 40 day moving average at 4.010 and last week’s 3.931 low.
The market is pulling back today following another unsuccessful breakout attempt overnight. Once support is found, another retest of 4.533-4.544 resistance is expected. A breakout above this resistance would turn the 4.985-5.000 level into the next upside price objective.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
Crude Oil Technical Update - Trend May Be Turning Back Up
The new front month January 15 crude oil contract has broken out above 10 day moving average resistance at 76.00 in the overnight session.
There has only been one daily close above the 10 day average since early-October and today’s breakout could be an early signal of a near term trend turn back higher.
In yesterday’s trade, the January contract was fairly well bid throughout the session closing at 75.85, up 1.35.
Former daily low support from mid-October at 78.64 now becomes the next area of resistance today followed by 80.00. Longer term resistance is the 40 day moving average at 81.25.
The 10 day moving average at 76.00 now becomes primary support. A drop back under this average will turn the near term trend back down with the 73.22 low set last week becoming the next downside objective.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
Colder Temperatures Expected To Return Next Week
Thursday, November 20, 2014
Natural Gas Corner - Market Review - Bulls Take Control In Late Day Trade
Another volatile trading session in the natural gas market which swung in a fairly wide daily trading range following release of the weekly storage report.
The storage report which showed the first withdrawal of winter 14-15 came in at 17 Bcf according to the EIA, near the upper end of pre-report estimates.
The December contract spiked up to a 4.502 high immediately following release of the report at 9:30 am central holding below yesterday's 4.508 weekly high was resistance.
By noon day trade, the contract had fallen to a 4.250 low. Buyers came back in during the last hour of trade rallying the contract to a 4.503 high by the session's close settling at 4.489. Another successful day for the natural gas bulls.
Today's 6-10 and 8-14 day NWS forecasts show continued below-normal temperatures across much of the upper-U.S. As long as forecasts remain cold, it is going to be difficult to push prices too far below the 4.000 level.
On the bearish side, 4.450-4.500 resistance needs to be broken soon to keep the near term trend up. With the market heading into a Thanksgiving holiday week, buyers might be more tempted to sit on the sidelines rather than adding to new positions near a 4-month high.
Any subsequent warm up in the forecasts could crater the market lower. Longer term, 4.985-5.000 remains the initial upside objective for this current rally with the possibility for price spikes into the 6.000-8.000 level in upcoming months if winter heating demand for natural gas is higher than expected.
The storage report which showed the first withdrawal of winter 14-15 came in at 17 Bcf according to the EIA, near the upper end of pre-report estimates.
The December contract spiked up to a 4.502 high immediately following release of the report at 9:30 am central holding below yesterday's 4.508 weekly high was resistance.
By noon day trade, the contract had fallen to a 4.250 low. Buyers came back in during the last hour of trade rallying the contract to a 4.503 high by the session's close settling at 4.489. Another successful day for the natural gas bulls.
Today's 6-10 and 8-14 day NWS forecasts show continued below-normal temperatures across much of the upper-U.S. As long as forecasts remain cold, it is going to be difficult to push prices too far below the 4.000 level.
On the bearish side, 4.450-4.500 resistance needs to be broken soon to keep the near term trend up. With the market heading into a Thanksgiving holiday week, buyers might be more tempted to sit on the sidelines rather than adding to new positions near a 4-month high.
Any subsequent warm up in the forecasts could crater the market lower. Longer term, 4.985-5.000 remains the initial upside objective for this current rally with the possibility for price spikes into the 6.000-8.000 level in upcoming months if winter heating demand for natural gas is higher than expected.
Dow Jones - Natural Gas Rallies To A 4-Year Price High
DJ Natural Gas Sets Four-Month High on Season's First Stockpile Drain
By Timothy Puko
NEW YORK--Natural-gas prices closed at a new four-month high Thursday as an early burst of winter cold drains
stockpiles for the first time this season.
The Arctic chill that descended for about a week has exposed lingering fears about the potential for gas to
skyrocket. Prices shot past $6 a million British thermal units during last winter's historic cold, and some traders
don't want to be left out if November's weather is a sign of things to come.
About half of all U.S. homes rely on natural gas for heat, and cold weather spurs demand. November is likely to be a
historic month for that weather-related consumption, according to MDA Weather Services. The country is on pace to have
more days cold enough to require heating than any other November since at least 2000, MDA said.
Investors are also concerned about cold-related production cuts that can further tighten the market. So-called
"freeze offs" that can limit work at drill sites and outages at several eastern processing plants have been a hot topic
of conversation, said Mike Tran, analyst at CIBC World Markets Inc.
It likely helped the supply-demand balance to be tighter than expected last week, he said in a note. The U.S.
Information Administration said Thursday that stockpiles shrank by 17 billion cubic feet for the week that ended Nov.
14, compared with the 11-bcf withdrawal expected by analysts and brokers.
Prices rose after the news and finished with another day of sizeable gains in a month filled with them. The
front-month December contract settled up 11.8 cents, or 2.7%, at $4.489/mmBtu on the New York Mercantile Exchange. That
was the highest closing price since June 25, breaking a four-month high set just two weeks ago. Prices are up nearly
13% in a week.
BP Capital, which has a bearish view on natural-gas prices into next year, has moved in to short-term bullish
positions to account for the weather, said portfolio manager Brian Bradshaw. Weather can move the market so
dramatically that you have to account for it, he added.
The Dallas-based fund has a total of $1 billion in assets under management, including $300 million in commodity
funds. Mr. Bradshaw declined to say specifically how much he has moved into bullish natural-gas positions.
"Everyone thinks it's not possible" to have another winter like last year, Mr. Bradshaw said. "But the weather does
impossible things all the time."
Write to Timothy Puko at tim.puko@wsj.com>
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 20, 2014 15:09 ET (20:09 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112014 20:09 -- GMT
------
By Timothy Puko
NEW YORK--Natural-gas prices closed at a new four-month high Thursday as an early burst of winter cold drains
stockpiles for the first time this season.
The Arctic chill that descended for about a week has exposed lingering fears about the potential for gas to
skyrocket. Prices shot past $6 a million British thermal units during last winter's historic cold, and some traders
don't want to be left out if November's weather is a sign of things to come.
About half of all U.S. homes rely on natural gas for heat, and cold weather spurs demand. November is likely to be a
historic month for that weather-related consumption, according to MDA Weather Services. The country is on pace to have
more days cold enough to require heating than any other November since at least 2000, MDA said.
Investors are also concerned about cold-related production cuts that can further tighten the market. So-called
"freeze offs" that can limit work at drill sites and outages at several eastern processing plants have been a hot topic
of conversation, said Mike Tran, analyst at CIBC World Markets Inc.
It likely helped the supply-demand balance to be tighter than expected last week, he said in a note. The U.S.
Information Administration said Thursday that stockpiles shrank by 17 billion cubic feet for the week that ended Nov.
14, compared with the 11-bcf withdrawal expected by analysts and brokers.
Prices rose after the news and finished with another day of sizeable gains in a month filled with them. The
front-month December contract settled up 11.8 cents, or 2.7%, at $4.489/mmBtu on the New York Mercantile Exchange. That
was the highest closing price since June 25, breaking a four-month high set just two weeks ago. Prices are up nearly
13% in a week.
BP Capital, which has a bearish view on natural-gas prices into next year, has moved in to short-term bullish
positions to account for the weather, said portfolio manager Brian Bradshaw. Weather can move the market so
dramatically that you have to account for it, he added.
The Dallas-based fund has a total of $1 billion in assets under management, including $300 million in commodity
funds. Mr. Bradshaw declined to say specifically how much he has moved into bullish natural-gas positions.
"Everyone thinks it's not possible" to have another winter like last year, Mr. Bradshaw said. "But the weather does
impossible things all the time."
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 20, 2014 15:09 ET (20:09 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112014 20:09 -- GMT
------
EIA Storage Report - 17 Withdrawal - High End of Expectations
For the week ended
Nov 14:
EIA Withdrawal - 17
Last Year's Draw - 36 BCF
5 Yr Avg Draw - 10 BCF
Range of Estimates - 4 BCf to 22 BCF
Avg Estimate - 11 BCF
Total Gas in Storage - 3.594 TCF
EIA Withdrawal - 17
Last Year's Draw - 36 BCF
5 Yr Avg Draw - 10 BCF
Range of Estimates - 4 BCf to 22 BCF
Avg Estimate - 11 BCF
Total Gas in Storage - 3.594 TCF
Dow Jones - Morning Natural Gas Commentary
DJ Natural Gas Futures Rising on Early Winter Demand
By Timothy Puko
NEW YORK--Natural gas futures are rising for the fourth time in five sessions as analysts expect heating demand is
already hitting levels common for mid-winter.
Natural gas for December delivery rose 3.6 cents, or 0.8%, to $4.407 a million British thermal units on the New York
Mercantile Exchange. Prices are now up nearly 11% from the month's low closing price set a week ago.
The cold snap that started last week is likely lead to the first storage withdrawal of the year, according to the
Wall Street Journal's weekly survey of analysts and brokers. They expect that stockpiles shrunk by 11 billion cubic
feet for the week that ended Nov. 14, about on par with the five-year average for the week, a 10-bcf withdrawal. The
U.S. Energy Information Administration plans to announce the official numbers at 10:30 a.m.
But it may be the following week's demand that keeps pushing up the market, analysts said. Some are already
predicting a second withdrawal larger than 150 bcf. That is more akin to a week at the peak of winter cold in January
than for mid-November, Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York, said in a note.
"The market is much more focused on large supply declines that will be forthcoming next week," Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates, said in a note. Prices aren't likely to fall back until
temperatures return to normal, he added.
But normal temperatures are barely visible in the newest weather forecasts for the next two weeks. Weather Services
International in Andover, Mass., said a cold air mass could "engulf the eastern two-thirds of the nation" in the first
week of December. It is forecasting highs between the upper teens and 30s for the northern Plains, the Midwest and
parts of the Northeast.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.40/mmBtu, compared with
Wednesday's range of $4.35-$4.55. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$4.65-$5.95/mmBtu, compared with Wednesday's range of $4.70 to $5.00.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 20, 2014 09:19 ET (14:19 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112014 14:19 -- GMT
------
By Timothy Puko
NEW YORK--Natural gas futures are rising for the fourth time in five sessions as analysts expect heating demand is
already hitting levels common for mid-winter.
Natural gas for December delivery rose 3.6 cents, or 0.8%, to $4.407 a million British thermal units on the New York
Mercantile Exchange. Prices are now up nearly 11% from the month's low closing price set a week ago.
The cold snap that started last week is likely lead to the first storage withdrawal of the year, according to the
Wall Street Journal's weekly survey of analysts and brokers. They expect that stockpiles shrunk by 11 billion cubic
feet for the week that ended Nov. 14, about on par with the five-year average for the week, a 10-bcf withdrawal. The
U.S. Energy Information Administration plans to announce the official numbers at 10:30 a.m.
But it may be the following week's demand that keeps pushing up the market, analysts said. Some are already
predicting a second withdrawal larger than 150 bcf. That is more akin to a week at the peak of winter cold in January
than for mid-November, Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York, said in a note.
"The market is much more focused on large supply declines that will be forthcoming next week," Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates, said in a note. Prices aren't likely to fall back until
temperatures return to normal, he added.
But normal temperatures are barely visible in the newest weather forecasts for the next two weeks. Weather Services
International in Andover, Mass., said a cold air mass could "engulf the eastern two-thirds of the nation" in the first
week of December. It is forecasting highs between the upper teens and 30s for the northern Plains, the Midwest and
parts of the Northeast.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.40/mmBtu, compared with
Wednesday's range of $4.35-$4.55. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$4.65-$5.95/mmBtu, compared with Wednesday's range of $4.70 to $5.00.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 20, 2014 09:19 ET (14:19 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112014 14:19 -- GMT
------
Natural Gas Technical Update - Weekly High Resistance Holds On Wednesday - Bearish Turn Back Lower?
Natural gas prices moved sharply higher for a second time this week in Wednesday’s trade with the December 14 contract gaining 3%.
The December contract rallied up to a 4.508 intraday high but was unable to breakout above 4.544 weekly high resistance. It pulled back from the daily high to close the session at 4.371, up .127.
The trend remains up but the December contract has now failed to clear 4.450-4.500 resistance on five separate occasions over the past two weeks including the overnight session.
Failure to breakout quickly above 4.544 could see trend turn back lower possibly dropping the market back toward the 4.000 level. The 200 day moving average has been broken intraday as resistance but there hasn’t been a daily close above this average since last June which is another bearish signal.
A breakout above 4.508-4.544 weekly high resistance would turn the 4.985-5.000 highs set in early-2014 into the next longer term price objective.
If resistance holds, the gap area between 4.074-4.113 created on Monday’s open will likely be closed followed by a retest of 40 day moving average and last week’s low as support between 3.931 and 4.000.
The next few days of trade will be very important technically in helping to determine the upcoming trend for the market.
Technical Indicators: Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bullish
Crude Oil Technical Update - No Bottom In Sight
No change in the technical outlook for today’s expiring December 14 crude oil contract which remains in a steady downtrend. A brief uptick in Wednesday’s session was quickly sold back down with the December contract settling the day at 74.58, down 3 ticks.
73.25 which was a 4-year spot price low set last week has now held as support the past three sessions. A drop under 73.25 would turn weekly lows at 69.50-70.50 and 64.00-65.00 into the next longer term support levels.
The 10 day moving average which held as resistance on Tuesday’s failed rally attempt is at the 76.05 today. Longer term resistance 79.10-80.00 followed by the 40 day moving average at 82.00.
Bottom line – Crude oil remains in a relentless downtrend which currently shows no technical sign of bottoming.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Wednesday, November 19, 2014
Natural Gas Corner - Market Review - Natural Gas Prices Reach "Breakout" Resistance
Recent volatility has been near record high for the beginning of winter as the chart to the left shows.
A rally which began on October 28th at a 3.620 contract low topped out 10 days later at a 4.544 high, a gain of over 25%. The rally was followed by a downside correction last week which erased over 60% of the previous market gains. But in just three days of trade this week, the market is once again approaching "breakout" resistance.
This resistance shown via the red horizontal line is previous daily lows from last May which are now acting as resistance over the past two weeks. The market has pushed above this resistance level intraday but has yet to post a daily close above 4.450-4.500. If this resistance is broken, the 4.985-5.000 highs set in early-2014 will become the next longer term price objective.
Tomorrow's weekly storage report could be the factor to rally the market higher. Or it could have the opposite effect if it comes in with a small injection rather than a 10-15 Bcf withdrawal many analysts are predicting.
Natural gas is currently in a weather driven market which is typically volatile and extremely choppy as the last three weeks have shown. Winter has started out on the cold side and could be a sign of things to come.
If the current rally fails, the market could quickly set back toward the lower-4.000 level and possibly under. But longer term, weakness should be well supported as the winter 14-15 natural gas rally progresses.
Analysts' Estimates For Tomorrow's EIA Storage Report - First Withdrawal of Winter 14-15 Expected
DJ Analysts See 11-Billion-Cubic-Feet Withdrawal from U.S. Natural Gas Inventories
By Timothy Puko
Analysts and traders expect government data scheduled for release Thursday to show natural gas inventories declined
by 1 billion cubic feet more than they usually do at this time of year.
The U.S. Energy Information Administration is expected to report that storage levels dropped by 11 bcf of gas during
the week ended Nov. 14, according to the average forecast of 16 analysts and brokers surveyed by The Wall Street
Journal.
The EIA is scheduled to release its storage data for the week on Thursday at 10:30 a.m. EDT.
For the Nov. 14 week, the median estimate is for a withdrawal of 10.5 bcf. Estimates ranged from a decrease of 4 bcf
to a decrease of 22 bcf.
The estimate for Nov. 14 is less than the 36 bcf taken from storage for the same week last year and more than the
10-bcf five-year average withdrawal for that week.
If the storage estimate is correct, inventories as of Nov. 14 totaled 3.6 trillion cubic feet, 5.1% below levels from
a year ago and 6.2% below the five-year average for the same week.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 19, 2014 12:29 ET (17:29 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
111914 17:29 -- GMT
------
By Timothy Puko
Analysts and traders expect government data scheduled for release Thursday to show natural gas inventories declined
by 1 billion cubic feet more than they usually do at this time of year.
The U.S. Energy Information Administration is expected to report that storage levels dropped by 11 bcf of gas during
the week ended Nov. 14, according to the average forecast of 16 analysts and brokers surveyed by The Wall Street
Journal.
The EIA is scheduled to release its storage data for the week on Thursday at 10:30 a.m. EDT.
For the Nov. 14 week, the median estimate is for a withdrawal of 10.5 bcf. Estimates ranged from a decrease of 4 bcf
to a decrease of 22 bcf.
The estimate for Nov. 14 is less than the 36 bcf taken from storage for the same week last year and more than the
10-bcf five-year average withdrawal for that week.
If the storage estimate is correct, inventories as of Nov. 14 totaled 3.6 trillion cubic feet, 5.1% below levels from
a year ago and 6.2% below the five-year average for the same week.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 19, 2014 12:29 ET (17:29 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
111914 17:29 -- GMT
------
Dow Jones - Morning Natural Gas Commentary - Prices Rebound On Winter Chill
DJ Natural Gas Futures Rebound on Winter Chill
By Timothy Puko
Natural gas futures rebounded Wednesday as cooling forecasts pushed another big day of gains.
Natural gas for December delivery rose 15.4 cents, or 3.6%, to $4.398 a million British thermal units on the New York
Mercantile Exchange. After a small dip yesterday, prices are again pushing toward a five-month high. Big gains Monday
and Wednesday have gas up 9.6% for the week so far, as cold weather forecasts drive expectations for heavy demand for
the heating fuel.
Forecasts for winter cold have repeatedly boosted prices since late October. Many traders are still thinking about
historic cold and record demand from last winter that sent prices soaring above $6/mmBtu and now they're jumping on any
sign a repeat could be on the way.
Wednesday's morning weather updates, though mixed, did show that the start of December is likely to be slightly
colder than expected yesterday. Temperatures two-to-five-degrees below normal are likely to spread further into the
west than expected, including the high-demand Chicago market, MDA Weather Services said.
"You get a news story that comes in that says we're going to freeze ... and it sends it through the roof," said John
Woods, president of JJ Woods Associates and a Nymex floor trader.
The short-term burst of cold this week isn't likely to last as long as expected, but it's still influencing traders,
analysts said.
"It may not officially be winter yet but it certainly feels like the heart of winter in many parts of the U.S.,"
Dominick Chirichella, analyst at the Energy Management Institute, said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.43/mmBtu, compared with Tuesday's
range of $4.2925-$4.34. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $5.00-$5.50/mmBtu,
with Tuesday's range of $5.25 to $7.00.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 19, 2014 09:45 ET (14:45 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
111914 14:45 -- GMT
------
By Timothy Puko
Natural gas futures rebounded Wednesday as cooling forecasts pushed another big day of gains.
Natural gas for December delivery rose 15.4 cents, or 3.6%, to $4.398 a million British thermal units on the New York
Mercantile Exchange. After a small dip yesterday, prices are again pushing toward a five-month high. Big gains Monday
and Wednesday have gas up 9.6% for the week so far, as cold weather forecasts drive expectations for heavy demand for
the heating fuel.
Forecasts for winter cold have repeatedly boosted prices since late October. Many traders are still thinking about
historic cold and record demand from last winter that sent prices soaring above $6/mmBtu and now they're jumping on any
sign a repeat could be on the way.
Wednesday's morning weather updates, though mixed, did show that the start of December is likely to be slightly
colder than expected yesterday. Temperatures two-to-five-degrees below normal are likely to spread further into the
west than expected, including the high-demand Chicago market, MDA Weather Services said.
"You get a news story that comes in that says we're going to freeze ... and it sends it through the roof," said John
Woods, president of JJ Woods Associates and a Nymex floor trader.
The short-term burst of cold this week isn't likely to last as long as expected, but it's still influencing traders,
analysts said.
"It may not officially be winter yet but it certainly feels like the heart of winter in many parts of the U.S.,"
Dominick Chirichella, analyst at the Energy Management Institute, said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.43/mmBtu, compared with Tuesday's
range of $4.2925-$4.34. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $5.00-$5.50/mmBtu,
with Tuesday's range of $5.25 to $7.00.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
November 19, 2014 09:45 ET (14:45 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
111914 14:45 -- GMT
------
Subscribe to:
Posts (Atom)