natural gas
Wednesday, December 24, 2014
Tuesday, December 23, 2014
Dow Jones Natural Gas - Gas Gains Breaking Losing Streak
DJ Natural Gas Gains, Breaking Losing Streak
By Timothy Puko
Natural gas prices rose Tuesday, rebounding from nearly two-year lows and snapping a three-session losing streak.
The front-month January contract settled up 2.7 cents, or 0.9%, at $3.171 a million British thermal units on the New
York Mercantile Exchange. The bounce ended a losing streak that had brought prices down as much as 16%.
Prices flip-flopped around unchanged for most of the session, finishing higher from a rally that started around 1
p.m. Brokers and analysts say there are still bearish trends in the market, making a turnaround difficult.
Power plants are likely to start switching to use more natural gas at these prices, Aaron Calder, senior market
analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. And there is still plenty of time for
cold weather to drive demand and possibly curtail some production in January and February, analysts said.
"The table is set for a potential rebound, but none of it matters if the mild winter continues," Mr. Calder said.
About half of all U.S. homes use natural gas for home heating, making it the primary driver for demand. Colder
temperatures are on the way, but they're likely to hit 60 degrees Fahrenheit first, on Christmas, in major northern
heating markets, according to MDA Information Systems LLC.
"You're not burning the gas," said Frank Clements, co-owner of Meridian Energy Brokers Inc.
Temperatures from 2- to 15-degrees-below normal will stretch from Pittsburgh to Los Angeles around New Year's Day,
but that severe cold is likely to dissipate by the following weekend, meteorologists said. And production is so strong
that traders and analysts believe it would take sustained severe cold to absorb the record supply.
--Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 23, 2014 15:02 ET (20:02 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122314 20:02 -- GMT
------
^^^^^^
By Timothy Puko
Natural gas prices rose Tuesday, rebounding from nearly two-year lows and snapping a three-session losing streak.
The front-month January contract settled up 2.7 cents, or 0.9%, at $3.171 a million British thermal units on the New
York Mercantile Exchange. The bounce ended a losing streak that had brought prices down as much as 16%.
Prices flip-flopped around unchanged for most of the session, finishing higher from a rally that started around 1
p.m. Brokers and analysts say there are still bearish trends in the market, making a turnaround difficult.
Power plants are likely to start switching to use more natural gas at these prices, Aaron Calder, senior market
analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. And there is still plenty of time for
cold weather to drive demand and possibly curtail some production in January and February, analysts said.
"The table is set for a potential rebound, but none of it matters if the mild winter continues," Mr. Calder said.
About half of all U.S. homes use natural gas for home heating, making it the primary driver for demand. Colder
temperatures are on the way, but they're likely to hit 60 degrees Fahrenheit first, on Christmas, in major northern
heating markets, according to MDA Information Systems LLC.
"You're not burning the gas," said Frank Clements, co-owner of Meridian Energy Brokers Inc.
Temperatures from 2- to 15-degrees-below normal will stretch from Pittsburgh to Los Angeles around New Year's Day,
but that severe cold is likely to dissipate by the following weekend, meteorologists said. And production is so strong
that traders and analysts believe it would take sustained severe cold to absorb the record supply.
--Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 23, 2014 15:02 ET (20:02 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122314 20:02 -- GMT
------
^^^^^^
Dow Jones - Natural Gas Likely to Cause More Driller Indigestion
DJ Natural Gas Likely to Cause More Driller Indigestion--Ahead of the Tape
By Spencer Jakab
Chances of a white Christmas in the U.S. haven't been so low in at least a decade. That has natural-gas drillers
feeling blue this holiday season.
The heating fuel has shed nearly a third of its value since late November, trading at about $3.17 a million
British thermal units, and may face even more short-term pressure. The immediate culprit is mild holiday weather. But
there are also nasty structural factors at play. The price drop is more bad news for North American energy producers
reeling from the epic drop in crude prices.
The heating, or withdrawal, season for natural gas, when underground storage is drained, is well under way. It
looks different than last year when inventories fell rapidly.
Warm winter weather last week in major U.S. population centers probably led to another subpar withdrawal, a figure
that will be reported Wednesday by the Energy Department. Analysts at First Enercast Financial expect storage to drop
by 59 billion cubic feet for the week ended Friday. The average withdrawal for the corresponding week over the past
decade has been 131 billion cubic feet.
Although there has been a glut in the natural-gas market for over five years, prices rallied in the spring and
again in the fall as reserves plunged and traders bet on a similar seasonal pattern repeating this winter. Instead,
reserves as compared with a year earlier went from a whopping 1 trillion cubic feet less in March to a small surplus
most recently. Last week's draw is expected to leave supplies some 165 billion cubic feet above year-ago levels, the
most since October 2012.
The Natural Gas Supply Association's winter forecast doesn't provide much reassurance: It sees winter temperatures
11% above last year and production at a record. In the slightly longer run, though, there is some reason for hope.
The collapse in the oil price and more recently in those of fuels derived from natural-gas liquids will curtail
many shale projects that would have added to supply next year. In some cases, oil and liquids revenue was sufficient
that drillers could almost literally give away their gas or even burn it off.
The oil rout means there is at least a faint light at the end of the tunnel and it may not even be a gas flare.
Write to Spencer Jakab at spencer.jakab@wsj.com
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(END) Dow Jones Newswires
December 23, 2014 15:01 ET (20:01 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122314 20:01 -- GMT
------
By Spencer Jakab
Chances of a white Christmas in the U.S. haven't been so low in at least a decade. That has natural-gas drillers
feeling blue this holiday season.
The heating fuel has shed nearly a third of its value since late November, trading at about $3.17 a million
British thermal units, and may face even more short-term pressure. The immediate culprit is mild holiday weather. But
there are also nasty structural factors at play. The price drop is more bad news for North American energy producers
reeling from the epic drop in crude prices.
The heating, or withdrawal, season for natural gas, when underground storage is drained, is well under way. It
looks different than last year when inventories fell rapidly.
Warm winter weather last week in major U.S. population centers probably led to another subpar withdrawal, a figure
that will be reported Wednesday by the Energy Department. Analysts at First Enercast Financial expect storage to drop
by 59 billion cubic feet for the week ended Friday. The average withdrawal for the corresponding week over the past
decade has been 131 billion cubic feet.
Although there has been a glut in the natural-gas market for over five years, prices rallied in the spring and
again in the fall as reserves plunged and traders bet on a similar seasonal pattern repeating this winter. Instead,
reserves as compared with a year earlier went from a whopping 1 trillion cubic feet less in March to a small surplus
most recently. Last week's draw is expected to leave supplies some 165 billion cubic feet above year-ago levels, the
most since October 2012.
The Natural Gas Supply Association's winter forecast doesn't provide much reassurance: It sees winter temperatures
11% above last year and production at a record. In the slightly longer run, though, there is some reason for hope.
The collapse in the oil price and more recently in those of fuels derived from natural-gas liquids will curtail
many shale projects that would have added to supply next year. In some cases, oil and liquids revenue was sufficient
that drillers could almost literally give away their gas or even burn it off.
The oil rout means there is at least a faint light at the end of the tunnel and it may not even be a gas flare.
Write to Spencer Jakab at spencer.jakab@wsj.com
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(END) Dow Jones Newswires
December 23, 2014 15:01 ET (20:01 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122314 20:01 -- GMT
------
Dow Jones Natural Gas - Demand Outlook Remains Soft
DJ Natural Gas Bounce Falls Flat on Soft Demand Outlook
By Timothy Puko
Natural gas is giving back early gains Tuesday morning and threatening to set a new two-year low as a soft demand
outlook continues to encourage traders to sell.
Natural gas for January delivery is down 1 cent, or 0.3%, at $3.134 a million British thermal units on the New
York Mercantile Exchange. It is the fourth-straight session of losses, a losing streak that has cut the front-month
contract by 16%.
Prices started higher Tuesday, but brokers said that was likely just a bit of temporary short covering, where
traders who sold contracts to bet on lower prices bought back in to cash out those winning bets. The larger trend is
still bearish, with record supply likely to overwhelm tepid demand, they said.
About half of all U.S. homes use natural gas for home heating, making it the primary driver for demand. But
temperatures could hit 60 degrees Fahrenheit on Christmas in New York, Philadelphia and Boston, some of the biggest
markets for heating demand, according to MDA Information Systems LLC.
"You're not burning the gas," said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York. "I
fully expect us to go lower. There's just too much pressure on the market."
Forecasts do turn colder-than-normal for most of the country by next week, but the most severe cold isn't likely
to hit the biggest markets for heating. Production is so strong that traders and analysts believe it would take severe
cold in those markets to absorb the record supply.
"People were expecting cold temperatures for the Christmas week, it didn't materialize and funds just bail on
this," said Santiago Diaz, a broker at INTL FCStone Latin America in Miami. "Unless that (severe cold) materializes
this thing could go lower and die."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.91/mmBtu, compared with
Monday's range of $2.95-$3.18. Cash prices at the Transco Z6 hub in New York last traded at $1.75/mmBtu, compared with
Monday's range of $2.85 to $3.06.
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(END) Dow Jones Newswires
December 23, 2014 09:57 ET (14:57 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122314 14:57 -- GMT
------
By Timothy Puko
Natural gas is giving back early gains Tuesday morning and threatening to set a new two-year low as a soft demand
outlook continues to encourage traders to sell.
Natural gas for January delivery is down 1 cent, or 0.3%, at $3.134 a million British thermal units on the New
York Mercantile Exchange. It is the fourth-straight session of losses, a losing streak that has cut the front-month
contract by 16%.
Prices started higher Tuesday, but brokers said that was likely just a bit of temporary short covering, where
traders who sold contracts to bet on lower prices bought back in to cash out those winning bets. The larger trend is
still bearish, with record supply likely to overwhelm tepid demand, they said.
About half of all U.S. homes use natural gas for home heating, making it the primary driver for demand. But
temperatures could hit 60 degrees Fahrenheit on Christmas in New York, Philadelphia and Boston, some of the biggest
markets for heating demand, according to MDA Information Systems LLC.
"You're not burning the gas," said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York. "I
fully expect us to go lower. There's just too much pressure on the market."
Forecasts do turn colder-than-normal for most of the country by next week, but the most severe cold isn't likely
to hit the biggest markets for heating. Production is so strong that traders and analysts believe it would take severe
cold in those markets to absorb the record supply.
"People were expecting cold temperatures for the Christmas week, it didn't materialize and funds just bail on
this," said Santiago Diaz, a broker at INTL FCStone Latin America in Miami. "Unless that (severe cold) materializes
this thing could go lower and die."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.91/mmBtu, compared with
Monday's range of $2.95-$3.18. Cash prices at the Transco Z6 hub in New York last traded at $1.75/mmBtu, compared with
Monday's range of $2.85 to $3.06.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 23, 2014 09:57 ET (14:57 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122314 14:57 -- GMT
------
U.S. Dry Natural Gas Production Reaches New All-Time High
U.S. dry natural gas production was projected to be 3-4 Bcf higher this winter over last winter.
Production has instead climbed to 8+ Bcf higher than 2013 with much of the gain coming over the past two months.
Excess production and lower weather-related demand have dropped prices back toward 2013 price lows.
Natural Gas Technical Update - Market Crashes Back To 2013 Price Lows
The natural gas market has essentially crashed over the past 3 sessions with the spot January 15 contract losing .558 or 15.1%.
In yesterday’s trade, the January contract fell to a 3.120 low, the lowest price level the market has traded at since August 2013.
The trend remains down with weekly chart support at 3.050-3.120 being primary support. A drop under 3.050 would turn 2.750-2.760 into the next longer term support.
An open gap created on Monday between 3.351-3.444 is the first area of resistance today with longer term resistance at the 10 day moving average currently at 3.560.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Consolidation Just Above 5 1/2 Year Price Low
The February 15 crude oil contract remains in a sideways consolidation range trading just above the contract low set last week.
Over the past 4 days, the 10 day moving average has held as resistance near the daily high keeping the primary market trend bearish.
The 53.94 low set last week by the February contract extending down to 53.60 is the first level of support followed by 50.00-50.50.
Longer term support and the downside objective for this current downtrend is 16-year trend line support from the weekly chart between 45.00-47.00.
The 10 day moving average is resistance today at 56.10. A rally above this average could initiate short-covering ahead of the Christmas holiday.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Monday, December 22, 2014
Dow Jones End of Day Natural Gas Commentary - Market Nears 2-Year Price Low
DJ Natural Gas Slides to Nearly Two-Year Low on Slow Stockpile Drain
By Timothy Puko
Natural gas prices closed at nearly a two-year low Monday as a slow stockpile drain eased investors' concerns
about supply shortages during the winter heating season.
Natural gas for January delivery settled down 32 cents, or 9.3%, at $3.144 a million British thermal units on the
New York Mercantile Exchange. It was the biggest one-day percentage loss since February, and the lowest closing price
since January 2013.
Prices are now down 15% in three straight losing sessions. Natural gas moved into a bear market during that streak
and is down 30% from the six-month high closing price of $4.489/mmBtu hit just a month ago.
Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low
stockpiles to catch up to where they were a year ago. That has encouraged the belief that supply is relatively healthy
and emboldened traders to sell, even with meteorologists predicting a colder-than-normal January and February are on
the way.
"Overall we're in a bear market here, so you have to sell," said Scott Gettleman, an independent trader in New
York.
Several weather forecasts had predicted far-below-normal temperatures spreading across the country late this week,
but those forecasts retreated in the last 24 hours. Meteorologists are predicting only slightly below-normal
temperatures for much of the country and normal or above-normal temperatures for many of the biggest East Coast
markets.
Half of all U.S. homes use natural gas for heating, making winter cold typically the biggest driver for demand.
Without severe cold in the forecast, traders see record production continuing to overwhelm the market.
"It highlights the incredible sensitivity of the market to weather and, right now, Mother Nature has been very,
very bearish," said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm.
Mild weather not only limits demand, it allows drillers to work uninterrupted. They are producing about 8 billion
cubic feet a day more than this time a year ago, Macquarie Research said last week as the losing streak started.
Macquarie and other analysts say that will push U.S. gas stockpiles beyond their five-year average levels by next
month. The unseasonably warm December already limited stockpile drains so much that last week the total amount of gas
in storage surpassed levels from a year ago for the first time in nearly a year. Many traders are selling to stay ahead
of this trend, analysts said.
Stockpiles were at 3.3 trillion cubic feet on Dec. 12, according to the U.S. Energy Information Administration.
The EIA is planning to release its next weekly update at noon EST Wednesday, a day earlier than usual because of the
Christmas holiday.
"The market is looking for a string of relatively low weekly storage withdrawals ahead and the increased
likelihood of an unmanageable" amount of gas in storage by the end of the winter, Teri Viswanath, a natural-gas
strategist at BNP Paribas SA in New York, said in a note. By March, stockpiles could be double or more what they were
at the end of the previous winter, as high as 2.2 trillion cubic feet, she said.
Monday's price move was so severe that analyst Jim Ritterbusch downgraded his price forecast for the rest of the
winter. The market had rejected several opportunities to rally and appeared to enter a lower trading range, he said,
likely between $3.05/mmBtu and $3.55/mmBtu, about 50 cents below the range he had predicted a week ago.
Write to Timothy Puko at timothy.puko@wsj.com
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(END) Dow Jones Newswires
December 22, 2014 15:14 ET (20:14 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122214 20:14 -- GMT
------
By Timothy Puko
Natural gas prices closed at nearly a two-year low Monday as a slow stockpile drain eased investors' concerns
about supply shortages during the winter heating season.
Natural gas for January delivery settled down 32 cents, or 9.3%, at $3.144 a million British thermal units on the
New York Mercantile Exchange. It was the biggest one-day percentage loss since February, and the lowest closing price
since January 2013.
Prices are now down 15% in three straight losing sessions. Natural gas moved into a bear market during that streak
and is down 30% from the six-month high closing price of $4.489/mmBtu hit just a month ago.
Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low
stockpiles to catch up to where they were a year ago. That has encouraged the belief that supply is relatively healthy
and emboldened traders to sell, even with meteorologists predicting a colder-than-normal January and February are on
the way.
"Overall we're in a bear market here, so you have to sell," said Scott Gettleman, an independent trader in New
York.
Several weather forecasts had predicted far-below-normal temperatures spreading across the country late this week,
but those forecasts retreated in the last 24 hours. Meteorologists are predicting only slightly below-normal
temperatures for much of the country and normal or above-normal temperatures for many of the biggest East Coast
markets.
Half of all U.S. homes use natural gas for heating, making winter cold typically the biggest driver for demand.
Without severe cold in the forecast, traders see record production continuing to overwhelm the market.
"It highlights the incredible sensitivity of the market to weather and, right now, Mother Nature has been very,
very bearish," said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm.
Mild weather not only limits demand, it allows drillers to work uninterrupted. They are producing about 8 billion
cubic feet a day more than this time a year ago, Macquarie Research said last week as the losing streak started.
Macquarie and other analysts say that will push U.S. gas stockpiles beyond their five-year average levels by next
month. The unseasonably warm December already limited stockpile drains so much that last week the total amount of gas
in storage surpassed levels from a year ago for the first time in nearly a year. Many traders are selling to stay ahead
of this trend, analysts said.
Stockpiles were at 3.3 trillion cubic feet on Dec. 12, according to the U.S. Energy Information Administration.
The EIA is planning to release its next weekly update at noon EST Wednesday, a day earlier than usual because of the
Christmas holiday.
"The market is looking for a string of relatively low weekly storage withdrawals ahead and the increased
likelihood of an unmanageable" amount of gas in storage by the end of the winter, Teri Viswanath, a natural-gas
strategist at BNP Paribas SA in New York, said in a note. By March, stockpiles could be double or more what they were
at the end of the previous winter, as high as 2.2 trillion cubic feet, she said.
Monday's price move was so severe that analyst Jim Ritterbusch downgraded his price forecast for the rest of the
winter. The market had rejected several opportunities to rally and appeared to enter a lower trading range, he said,
likely between $3.05/mmBtu and $3.55/mmBtu, about 50 cents below the range he had predicted a week ago.
Write to Timothy Puko at timothy.puko@wsj.com
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(END) Dow Jones Newswires
December 22, 2014 15:14 ET (20:14 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122214 20:14 -- GMT
------
Dow Jones Natural Gas - Market Slides to 16-Month Price Low
DJ Natural Gas Slides to 16-Month Low on Slow Stockpile Drain
By Timothy Puko
Natural gas prices fell to a 16-month low Monday as a slow stockpile drain eases investors' concerns about supply
shortages during the winter heating season.
Natural gas for January delivery was down 23.4 cents, or 6.8%, at $3.23 a million British thermal units on the New
York Mercantile Exchange. It was the biggest one-day percentage loss since February.
The contract slid by about 10 cents as soon as electronic trading opened Sunday evening, but losses have continued
throughout the morning.
Prices are now down nearly 13% in three straight sessions. Natural gas has moved into a bear market during that
losing streak and is down 28% from the six-month high of $4.489/mmBtu it hit just a month ago.
Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low
stockpiles to catch up to where they were a year ago. That has encouraged the belief that stockpiles are relatively
healthy and emboldened traders to sell even with meteorologists predicting a colder-than-normal January and February on
the way.
"Overall we're in a bear market here, so you have to sell," said Scott Gettleman, an independent trader in New
York.
Write to Timothy Puko at timothy.puko@wsj.com
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(END) Dow Jones Newswires
December 22, 2014 09:13 ET (14:13 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122214 14:13 -- GMT
------
By Timothy Puko
Natural gas prices fell to a 16-month low Monday as a slow stockpile drain eases investors' concerns about supply
shortages during the winter heating season.
Natural gas for January delivery was down 23.4 cents, or 6.8%, at $3.23 a million British thermal units on the New
York Mercantile Exchange. It was the biggest one-day percentage loss since February.
The contract slid by about 10 cents as soon as electronic trading opened Sunday evening, but losses have continued
throughout the morning.
Prices are now down nearly 13% in three straight sessions. Natural gas has moved into a bear market during that
losing streak and is down 28% from the six-month high of $4.489/mmBtu it hit just a month ago.
Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low
stockpiles to catch up to where they were a year ago. That has encouraged the belief that stockpiles are relatively
healthy and emboldened traders to sell even with meteorologists predicting a colder-than-normal January and February on
the way.
"Overall we're in a bear market here, so you have to sell," said Scott Gettleman, an independent trader in New
York.
Write to Timothy Puko at timothy.puko@wsj.com
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(END) Dow Jones Newswires
December 22, 2014 09:13 ET (14:13 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122214 14:13 -- GMT
------
Natural Gas Technical Update - The Bottoms Falls Out Of The Market
The January 15 natural gas contract begin last week’s session higher by nearly .140 topping out at a 3.936 high on Monday.
But by Friday’s close, the contract had lost .331 or 8.7% settling the week at a new 2014 low of 3.464.
Selling on Friday was heavily following an early morning breakout below 3.541-3.585 weekly low support. By falling under this support, the primary trend remains down.
The market has continued lower overnight falling under 3.380-3.400 weekly low support. This turns the 3.129 weekly low from August 2013 into the next primary support under the current 3.255 overnight low.
The open gap created overnight between 3.351-3.444 is the first area of resistance today followed by former weekly low support between 3.541-3.585.
Friday’s Commitment of Trader’s report showed the funds long 143,838 contracts, up 9,160 from the previous week.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Downtrend Has Stabilized, For Now
The new front month February 15 crude oil contract fell to a new 5 ½ year low of 53.94 in last Tuesday’s trade trending sideways into Friday’s close.
For the week, the February contract lost .95 settling Friday at 57.13.
The primary trend remains down although an upside correction following 3 weeks of heavy selling cannot be ruled out. A breakout above the 10 day average could bring in short-covering ahead of the Christmas-holiday.
The 10 day moving average which held as daily high resistance 3 times last week is the first area of resistance today at 58.10 followed by last week’s 59.27 high. Longer term resistance is former daily low support between 64.00-65.00.
Last week’s 53.94 low extending down to the current 2014 spot contract low of 53.60 is primary support followed by weekly chart support between 50.00-50.50. Longer term support and the downside price objective for this current downtrend is a 16-year trend line on the weekly chart between 45.00-47.00.
Friday’s Commitment of Trader’s report showed the funds adding to existing long positions estimated at 284,079 contracts, up 22,303 from the previous week.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Natural Gas Market - Market Review - Natural Gas Market Crashes
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.
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.
Friday, December 19, 2014
Dow Jones Natural Gas - Prices Drop As Production Soars
DJ Natural Gas Drops as Production Soars
By Christian Berthelsen
Natural gas futures tumbled 3.5% Friday in the wake of data showing the U.S. is beginning to develop a surplus of
the fuel thanks to soaring domestic production.
In the selloff, the market looked past forecasts for a return to more normal winter temperatures in the coming
days, with a cold blast expected to settle over much of the U.S. heading into the new year. This could boost demand for
natural gas to heat homes and businesses.
Natural gas for January delivery was down more than 9 cents at $3.5513 a million British thermal units, its lowest
point Nov. 14, 2013. The selloff extended Thursday's loss and put the futures in bear market territory after losing
roughly 20% in the last month.
Though the U.S. has begun to draw on natural gas supplies for fall and winter heating needs, continued booming
production from shale fields is helping to replenish supplies. As a result, withdrawals have been running less than
average.
Weekly data released by the U.S. Energy Information Administration on Thursday showed total domestic inventories
rose above year-ago levels for the first time in nearly a year and stand 7.3% below average--a gap analysts believe
could close in the coming weeks thanks to mild December temperatures and production of as much as 8 billion cubic feet
a day of gas.
"Stymied demand and record production continue to pressure prices lower, " research consultancy Schneider Electric
analyst Matt Smith said in a note.
In the physical market, cash prices for next-day delivery of gas at the benchmark Henry Hub last traded at $3.46 a
million Btus, below Thursday's range of $3.55-$3.715. Prices for gas at the Transco Z6 hub in New York traded in a
bid-offer range of $3.25-$3.75, compared with Thursday's range of $3.70-$3.80.
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(END) Dow Jones Newswires
December 19, 2014 09:43 ET (14:43 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121914 14:43 -- GMT
------
By Christian Berthelsen
Natural gas futures tumbled 3.5% Friday in the wake of data showing the U.S. is beginning to develop a surplus of
the fuel thanks to soaring domestic production.
In the selloff, the market looked past forecasts for a return to more normal winter temperatures in the coming
days, with a cold blast expected to settle over much of the U.S. heading into the new year. This could boost demand for
natural gas to heat homes and businesses.
Natural gas for January delivery was down more than 9 cents at $3.5513 a million British thermal units, its lowest
point Nov. 14, 2013. The selloff extended Thursday's loss and put the futures in bear market territory after losing
roughly 20% in the last month.
Though the U.S. has begun to draw on natural gas supplies for fall and winter heating needs, continued booming
production from shale fields is helping to replenish supplies. As a result, withdrawals have been running less than
average.
Weekly data released by the U.S. Energy Information Administration on Thursday showed total domestic inventories
rose above year-ago levels for the first time in nearly a year and stand 7.3% below average--a gap analysts believe
could close in the coming weeks thanks to mild December temperatures and production of as much as 8 billion cubic feet
a day of gas.
"Stymied demand and record production continue to pressure prices lower, " research consultancy Schneider Electric
analyst Matt Smith said in a note.
In the physical market, cash prices for next-day delivery of gas at the benchmark Henry Hub last traded at $3.46 a
million Btus, below Thursday's range of $3.55-$3.715. Prices for gas at the Transco Z6 hub in New York traded in a
bid-offer range of $3.25-$3.75, compared with Thursday's range of $3.70-$3.80.
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(END) Dow Jones Newswires
December 19, 2014 09:43 ET (14:43 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121914 14:43 -- GMT
------
Natural Gas Technical Update - New Lows Ahead?
The January 15 natural gas contract may be on the verge of pushing down to a new 2014 low after failing again on Thursday to clear resistance at the lower-3.800 level.
The natural gas market was higher in early trade on Thursday but sellers came in late dropping the January contract to a 3.642 daily settle, down .060.
3.541-3.585 remains primary support today with a drop under 3.541 turning 3.380-3.340 into the next downside support level.
The 10 day moving average at 3.670 is the first area of resistance followed by 3.800-3.820. Longer term resistance is the 3.936 weekly high posted on Monday.
Bottom line - Rallies continue to be sold as the market heads into a holiday weekend - Bearish.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Bears Remain In Control
A very small two day rally by today’s expiring January 15 crude oil contract turned back lower just under 10 day moving average resistance on Thursday.
The ensuing sell off from resistance dropped the January contract to a 54.11 daily settle, down 2.36 or 4.1%.
The primary trend remains down with 16-year weekly chart trend line support between 45.00-47.00 being the initial downside objective for this current downtrend.
The next level of support under the recent 53.60 low is at 50.00-50.50
The 10 day moving average at 58.30 will remain resistance upcoming trade. As long as the market trades under the 10 day average, the trend will remain down.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Thursday, December 18, 2014
Natural Gas Corner - Market Review - Natural Gas May Be On The Verge Of Selling Down To New 2014 Price Lows
The natural gas market remains soft as today's higher than expected storage withdrawal failed to ignite buying enthusiasm.
Upcoming weather predictions which have turned much colder than forecasts just a few days ago have been unable to move the market higher from its recent two week range.
Natural gas prices instead continue to trade just over 2014 lows as production and low storage withdrawals overshadow nearly everything else.
Today's 64 Bcf storage withdrawal was slightly higher than average guesstimates but well below levels needed to generate anxiety in the market about storage.
U.S production has by some reports has reached 8 Bcf per day higher this year over last which if correct would be 3-4 Bcf above previous estimates. An extra 8 Bcf of production per day could be enough to drop the market to new lows during December when demand is typically increasing.
Weakness in the other energy market particularly crude oil could also be spilling over into the natural gas market to some degree.
Selling today back toward recent lows is quite bearish given the colder forecasts. With the market heading into a holiday week, new price lows would not be surprising.
Upcoming weather predictions which have turned much colder than forecasts just a few days ago have been unable to move the market higher from its recent two week range.
Natural gas prices instead continue to trade just over 2014 lows as production and low storage withdrawals overshadow nearly everything else.
Today's 64 Bcf storage withdrawal was slightly higher than average guesstimates but well below levels needed to generate anxiety in the market about storage.
U.S production has by some reports has reached 8 Bcf per day higher this year over last which if correct would be 3-4 Bcf above previous estimates. An extra 8 Bcf of production per day could be enough to drop the market to new lows during December when demand is typically increasing.
Weakness in the other energy market particularly crude oil could also be spilling over into the natural gas market to some degree.
Selling today back toward recent lows is quite bearish given the colder forecasts. With the market heading into a holiday week, new price lows would not be surprising.
EIA Weekly Storage Report - 64 Bcf Draw - Slightly Above Pre-Report Estimates
For the week ended
Dec 12:
EIA Withdrawal - 64 BCF
Last Year's Draw - 256 BCF
5 Yr Avg Draw - 157 BCF
EIA Withdrawal - 64 BCF
Last Year's Draw - 256 BCF
5 Yr Avg Draw - 157 BCF
Dow Jones Natural Gas - Prices Rising On Cold Weather Forecasts
DJ Natural Gas Keeps Rising on Cold Weather Forecasts
By Timothy Puko
Natural-gas prices were extending their rally into a second session on Thursday, as forecasts for cold weather next
week appear more certain.
Natural gas for January delivery is up 5.2 cents, or 1.4%, at $3.754 a million British thermal units on the New York
Mercantile Exchange. The front-month contract has gained 3.7% since it closed Tuesday within 6 cents of its lowest
settlement of the year.
Weather forecasts are showing a cold front sweeping in by Christmas. More than half the country, from Chicago to Las
Vegas, will see below-normal temperatures by the end of next week, peaking at more than 15-degrees-below normal in
parts of the Rocky Mountain region, according to private meteorologists.
"It's not polar vortex cold, but (it is) significantly colder," said Frank Clements, co-owner of Meridian Energy
Brokers Inc.
Half of U.S. homes use gas for heating, making cold weather a peak driver for the natural gas market. Buyers were
slow to come in, but have responded as the forecasts grew more confident since Tuesday night, Mr. Clements said.
Prices below $3.60/mmBtu also encourage power plants to use more gas, which has inspired speculators to step in and
support prices there, according to energy-consulting firm Gelber & Associates in Houston.
And the oil markets have helped, too: As plummeting oil prices stabilize, commodity traders can stop selling other
energy products that they may have been liquidating to raise cash, Mr. Clements and other analysts have said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.7075/mmBtu, compared with
Wednesday's range of $3.58-$3.68. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$3.80/mmBtu to $3.98/mmBtu, compared with Wednesday's range of $3.70 to $3.75.
Analysts and brokers estimate that 61 billion cubic feet drained from natural-gas stockpiles last week, according to
the consensus average of 19 forecasts in The Wall Street Journal survey. Stockpiles had started the spring with less
than half the gas they had a year ago, but a drain of only 61 bcf last week would nearly close the deficit that has
lingered for months. The U.S. Energy Information Administration gives its weekly storage updates at 10:30 a.m.
Thursday.
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(END) Dow Jones Newswires
December 18, 2014 09:54 ET (14:54 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121814 14:54 -- GMT
------
By Timothy Puko
Natural-gas prices were extending their rally into a second session on Thursday, as forecasts for cold weather next
week appear more certain.
Natural gas for January delivery is up 5.2 cents, or 1.4%, at $3.754 a million British thermal units on the New York
Mercantile Exchange. The front-month contract has gained 3.7% since it closed Tuesday within 6 cents of its lowest
settlement of the year.
Weather forecasts are showing a cold front sweeping in by Christmas. More than half the country, from Chicago to Las
Vegas, will see below-normal temperatures by the end of next week, peaking at more than 15-degrees-below normal in
parts of the Rocky Mountain region, according to private meteorologists.
"It's not polar vortex cold, but (it is) significantly colder," said Frank Clements, co-owner of Meridian Energy
Brokers Inc.
Half of U.S. homes use gas for heating, making cold weather a peak driver for the natural gas market. Buyers were
slow to come in, but have responded as the forecasts grew more confident since Tuesday night, Mr. Clements said.
Prices below $3.60/mmBtu also encourage power plants to use more gas, which has inspired speculators to step in and
support prices there, according to energy-consulting firm Gelber & Associates in Houston.
And the oil markets have helped, too: As plummeting oil prices stabilize, commodity traders can stop selling other
energy products that they may have been liquidating to raise cash, Mr. Clements and other analysts have said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.7075/mmBtu, compared with
Wednesday's range of $3.58-$3.68. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$3.80/mmBtu to $3.98/mmBtu, compared with Wednesday's range of $3.70 to $3.75.
Analysts and brokers estimate that 61 billion cubic feet drained from natural-gas stockpiles last week, according to
the consensus average of 19 forecasts in The Wall Street Journal survey. Stockpiles had started the spring with less
than half the gas they had a year ago, but a drain of only 61 bcf last week would nearly close the deficit that has
lingered for months. The U.S. Energy Information Administration gives its weekly storage updates at 10:30 a.m.
Thursday.
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(END) Dow Jones Newswires
December 18, 2014 09:54 ET (14:54 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121814 14:54 -- GMT
------
Natural Gas Technical Update - Bullish Inside Range Day Posted On Wednesday
Natural gas prices moved back higher on Wednesday as the spot January 15 contract rallied off weekly low support to close the day up 2.3%.
The January contract also posted a potentially bullish inside range reversal day which has been confirmed with higher trade in today’s early session.
Another bullish indicator for the market was the winter 15/summer 15 spread which gained nearly 40% in yesterday’s trade.
Outside of a spike higher on Monday to a 3.936 high which did not hold, the January contract for the most part has been trading in a sideways range over the past 2 weeks alternating between 3.541-3.585 weekly low support and resistance at the 3.800-3.820 level.
A breakout above 3.820 today would be another bullish signal for the market but a breakout above resistance at the lower-4.000 level is needed to turn the longer term market trend back up.
A drop under 3.541-3.585 weekly low support would keep the primary market trend bearish with following support at late-2013 weekly lows at 3.380-3.400.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Second Higher Close On Wednesday For The First Time In 7 Weeks
The January 15 crude oil contract on Wednesday closed higher for a second consecutive day, the first time this has occurred in over 7 weeks.
Recent gains have been minimal with the January contract gaining 2 ticks on Tuesday and another .54 in Wednesday’s session to close the day at 56.47.
Profit-taking following release of the FED meeting results has stemmed the extreme selling in the market but the primary trend remains down. Tuesday’s 53.60 low is the first area of support followed by 50.00-50.50.
Longer term support and the downside objective for this current down trend is 16-year weekly chart trend line at the 45.00-47.00 level.
Upside resistance for today begins at yesterday’s 58.98 high at 59.70. The 10 day average would be a good selling area if reached.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Wednesday, December 17, 2014
Winter 15 / Summer 15 Natural Gas Spread Gains Nearly 40% In Today's Trade
The winter 15 (January 15-March 15) / Summer 15 (April 15-October) 15 natural gas spread gained nearly 40% in today's trade as winter demand may be finally coming back into the market.
This spread which settled at .169 on Tuesday widened out by .066 or 39% in today's session to settle at .235.
The winter / summer spread set a recent high of .857 (winter strip price above summer strip price) on November 21st but has since collapsed to a new low for 2014 at .146 by December 8th.
However, as shown on the chart, the sell off from the November high held above former trend line resistance as support which is a bullish technical indicator.
Today's strength in the winter 15 / summer 15 could be the precursor of a winter rally higher. Weather forecasts are slowly shifting back toward colder temperatures.
But until temperatures actually turns cold and remains cold drawing down storage, the natural gas market is not going a difficult time sustaining upside momentum given low storage withdrawals during December and new record highs on domestic dry gas production.
Dow Jones - Natural Gas Rises On Stronger Demand Prospects
DJ Natural Gas Rises on Prospects for Stronger Demand
By Timothy Puko
Natural gas closed higher, bouncing up from near seasonal lows, on prospects for stronger demand for home heating and
power plants, analysts said.
The front-month January contract settled up 8.3 cents, or 2.3%, at $3.702 a million British thermal units on the New
York Mercantile Exchange. The gains came after two days of losses that had brought Tuesday's closing price within 3
cents of the seven-week low.
Prices were low enough that power plants should start considering a switch from coal fuel to natural gas, Aaron
Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. That is the
primary supply-and-demand factor that has repeatedly stopped gas from falling far below $3.60/mmBtu this month, he
added.
Forecasts for 11 to 15 days out are also looking increasingly cold. Half of all U.S. homes rely on natural gas for
heat, making cold weather a prime driver for demand. Below-normal temperatures will be sweeping across nearly all of
the country, with temperatures more than 8-degrees-below normal from Chicago to Denver, according to Commodity Weather
Group.
The market had moved down Tuesday despite these weather patterns creeping into the forecasts. Above-normal
temperatures are still prevalent through Christmas and that divide encourages seesaw trading, Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates said in a note.
"We are not reading too much into" Wednesday's gains, he added. "We are still not seeing enough of an adjustment in
the short term temperature views to sustain a rally much above this week's $3.94 highs."
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(END) Dow Jones Newswires
December 17, 2014 14:51 ET (19:51 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
By Timothy Puko
Natural gas closed higher, bouncing up from near seasonal lows, on prospects for stronger demand for home heating and
power plants, analysts said.
The front-month January contract settled up 8.3 cents, or 2.3%, at $3.702 a million British thermal units on the New
York Mercantile Exchange. The gains came after two days of losses that had brought Tuesday's closing price within 3
cents of the seven-week low.
Prices were low enough that power plants should start considering a switch from coal fuel to natural gas, Aaron
Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. That is the
primary supply-and-demand factor that has repeatedly stopped gas from falling far below $3.60/mmBtu this month, he
added.
Forecasts for 11 to 15 days out are also looking increasingly cold. Half of all U.S. homes rely on natural gas for
heat, making cold weather a prime driver for demand. Below-normal temperatures will be sweeping across nearly all of
the country, with temperatures more than 8-degrees-below normal from Chicago to Denver, according to Commodity Weather
Group.
The market had moved down Tuesday despite these weather patterns creeping into the forecasts. Above-normal
temperatures are still prevalent through Christmas and that divide encourages seesaw trading, Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates said in a note.
"We are not reading too much into" Wednesday's gains, he added. "We are still not seeing enough of an adjustment in
the short term temperature views to sustain a rally much above this week's $3.94 highs."
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(END) Dow Jones Newswires
December 17, 2014 14:51 ET (19:51 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
Analysts' Estimates For Tomorrow's EIA Storage Report
DJ Analysts See 61-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
less than half of their average decline this time of year.
The U.S. Energy Information Administration is expected to report that storage levels fell by 61 billion cubic feet of
gas during the week ended Dec. 12, according to the average forecast of 19 analysts and traders 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. EST.
For the Dec. 12 week, the median estimate is for a drop of 61 bcf. Estimates range from a decline of 54 bcf to a
decline of 78 bcf.
The estimate for Dec. 12 is less than the 256 bcf drained from storage for the same week last year and the 157-bcf
five-year average drain for that week.
If the storage estimate is correct, inventories as of Dec. 15 totaled 3.3 trillion cubic feet, 0.3% below levels from
a year ago and 7.2% below the five-year average for the same week.
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(END) Dow Jones Newswires
December 17, 2014 12:26 ET (17:26 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121714 17:26 -- GMT
------
By Timothy Puko
Analysts and traders expect government data scheduled for release Thursday to show natural gas inventories shrunk by
less than half of their average decline this time of year.
The U.S. Energy Information Administration is expected to report that storage levels fell by 61 billion cubic feet of
gas during the week ended Dec. 12, according to the average forecast of 19 analysts and traders 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. EST.
For the Dec. 12 week, the median estimate is for a drop of 61 bcf. Estimates range from a decline of 54 bcf to a
decline of 78 bcf.
The estimate for Dec. 12 is less than the 256 bcf drained from storage for the same week last year and the 157-bcf
five-year average drain for that week.
If the storage estimate is correct, inventories as of Dec. 15 totaled 3.3 trillion cubic feet, 0.3% below levels from
a year ago and 7.2% below the five-year average for the same week.
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(END) Dow Jones Newswires
December 17, 2014 12:26 ET (17:26 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121714 17:26 -- GMT
------
Dow Jones Natural Gas - Higher On Prospects For Stronger Heating Demand
DJ Natural Gas Rises on Prospects for Stronger Heating Demand
By Timothy Puko
Natural-gas prices are rising Wednesday as cold forecasts for late December show prospects for stronger demand.
Natural gas for January delivery is up 7.6 cents, or 2.1%, at $3.695 a million British thermal units on the New York
Mercantile Exchange. The gains come after two days of losses that had brought Tuesday's closing price within 3 cents of
a seven-week low.
Forecasts for 11 to 15 days out are looking increasingly cold. Half of all U.S. homes rely on natural gas for heat,
making cold weather a prime driver for demand. Below-normal temperatures will be sweeping across nearly all of the
country, with temperatures more than 8-degrees-below normal from Chicago to Denver, according to Commodity Weather
Group.
The market had moved down Tuesday despite these weather patterns creeping into the forecasts. Above-normal
temperatures are still prevalent through Christmas, and that divide encourages seesaw trading, Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates said in a note.
"We are not reading too much into" Tuesday's gains, he added. "We are still not seeing enough of an adjustment in
the short term temperature views to sustain a rally much above this week's $3.94 highs."
January and February should be cold enough to lift prices, even if they are unlikely to be as extreme as last year,
said Energy Aspects, a research and consulting firm based in London. It expects gas to average $4/mmBtu in the first
three months of 2015, down 10 cents from its previous estimate.
Industrial demand also is likely to be strong in 2015, and exports to Mexico will rise from new pipelines, the group
said. With 13 gigawatts of coal-fired power also likely to close, the power sector will use more natural gas, too, it
added.
"We are now more bullish as the market has been heavily sold," the group said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.6475/mmBtu, compared with
Tuesday's range of $3.49-$3.67. Cash prices at the Transco Z6 hub in New York last traded at $3.72/mmBtu, compared with
Tuesday's range of $3.58 to $3.65.
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(END) Dow Jones Newswires
December 17, 2014 09:48 ET (14:48 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121714 14:48 -- GMT
------
By Timothy Puko
Natural-gas prices are rising Wednesday as cold forecasts for late December show prospects for stronger demand.
Natural gas for January delivery is up 7.6 cents, or 2.1%, at $3.695 a million British thermal units on the New York
Mercantile Exchange. The gains come after two days of losses that had brought Tuesday's closing price within 3 cents of
a seven-week low.
Forecasts for 11 to 15 days out are looking increasingly cold. Half of all U.S. homes rely on natural gas for heat,
making cold weather a prime driver for demand. Below-normal temperatures will be sweeping across nearly all of the
country, with temperatures more than 8-degrees-below normal from Chicago to Denver, according to Commodity Weather
Group.
The market had moved down Tuesday despite these weather patterns creeping into the forecasts. Above-normal
temperatures are still prevalent through Christmas, and that divide encourages seesaw trading, Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates said in a note.
"We are not reading too much into" Tuesday's gains, he added. "We are still not seeing enough of an adjustment in
the short term temperature views to sustain a rally much above this week's $3.94 highs."
January and February should be cold enough to lift prices, even if they are unlikely to be as extreme as last year,
said Energy Aspects, a research and consulting firm based in London. It expects gas to average $4/mmBtu in the first
three months of 2015, down 10 cents from its previous estimate.
Industrial demand also is likely to be strong in 2015, and exports to Mexico will rise from new pipelines, the group
said. With 13 gigawatts of coal-fired power also likely to close, the power sector will use more natural gas, too, it
added.
"We are now more bullish as the market has been heavily sold," the group said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.6475/mmBtu, compared with
Tuesday's range of $3.49-$3.67. Cash prices at the Transco Z6 hub in New York last traded at $3.72/mmBtu, compared with
Tuesday's range of $3.58 to $3.65.
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(END) Dow Jones Newswires
December 17, 2014 09:48 ET (14:48 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121714 14:48 -- GMT
------
Natural Gas Technical Update - Weekly Low Support Holds Again
A two day sell off in the natural gas market has dropped the spot January 15 contract from a 3.936 high set early-Monday down to a 3.605 low by Tuesday’s close, a loss of .331 or 8.5%.
The market remains technically weak as rallies continue to be sold. One of the few potentially bullish signals has been the inability for the spot market to push down to new 2014 lows. Last week’s 3.585 low held above the previous spot contract low of 3.541 set in October.
If 3.541-3.585 weekly support is broken, weekly lows from late-2013 at 3.380-3.400 will become the next downside support.
The January contract has reversed higher in early trade today testing 10 day moving average resistance at 3.690. Following resistance is at 3.800-3.820 and Monday’s 3.936 high.
The market looks trapped in another sideways range. A breakout above resistance at the lower-4.000 area needed to turn the longer term trend back higher.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Still Well Above Downside Price Objective
The January 15 crude oil contract spiked down to a new 5 ½ year low of 53.60 in early trade on Tuesday but was able to rally back toward unchanged by the close settling at 55.93, up 2 ticks.
The primary trend remains down with weekly chart trend line support between 45.00-47.00 remaining the downside price objective for this current sell off. The next level of support under Tuesday’s 53.90 is between 50.00-50.50.
The one-sided slide lower in the crude oil market that picked up momentum in late-November is a collapse not seen since 2008 when the spot market bottomed out at a 32.40 low.
It took nearly 12 weeks for the market to finally bottom in 2008 as is typically the case on long term crude oil lows. It would probably be better to let the market stabilize for several weeks before aggressively adding long positions.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Tuesday, December 16, 2014
Natural Gas Corner - Market Review - Are There Any Bulls Left?
Natural gas prices have cratered by nearly 10% from the highs set early-Monday as lower weather-related demand and high production have overshadowed colder forecasts.
The 6-10 day forecast remains normal or above for much of the upper U.S. but the 8-14 day forecast has turned markedly colder. The market's reaction to the colder forecasts so far has been limited.
There are a couple of factors to consider that could indicate a market low is near.
The first and most important factor is complacency which seems incredibly high and one-sided given that the heart of winter has yet to arrive. The "meat" of last winter's rally didn't hit until the middle weeks of January.
Last week's Commitment of Trader's report which shows how various market participants are positioned within a market had the hedge funds holding their lowest speculative long position in natural gas since last January as the market bottomed ahead of the winter rally. This again is a bullish contrarian indicator.
This week's storage withdrawal expected to be 59 Bcf according to recent surveys which will for a third week in a row fall well below the 5-year average withdrawal. The 2013 withdrawal for this upcoming report week was very high at 256 Bcf with the 5-year average being 157.
Yet natural gas market has not yet been able to push down to a new spot contract low which is 3.541 set in October in the face of overwhelmingly bearish news.
The canoe could very quickly tip back over to the other side. It is way too early to give up on a winter price rally in the natural gas market.
The 6-10 day forecast remains normal or above for much of the upper U.S. but the 8-14 day forecast has turned markedly colder. The market's reaction to the colder forecasts so far has been limited.
There are a couple of factors to consider that could indicate a market low is near.
The first and most important factor is complacency which seems incredibly high and one-sided given that the heart of winter has yet to arrive. The "meat" of last winter's rally didn't hit until the middle weeks of January.
Last week's Commitment of Trader's report which shows how various market participants are positioned within a market had the hedge funds holding their lowest speculative long position in natural gas since last January as the market bottomed ahead of the winter rally. This again is a bullish contrarian indicator.
This week's storage withdrawal expected to be 59 Bcf according to recent surveys which will for a third week in a row fall well below the 5-year average withdrawal. The 2013 withdrawal for this upcoming report week was very high at 256 Bcf with the 5-year average being 157.
Yet natural gas market has not yet been able to push down to a new spot contract low which is 3.541 set in October in the face of overwhelmingly bearish news.
The canoe could very quickly tip back over to the other side. It is way too early to give up on a winter price rally in the natural gas market.
Dow Jones Natural Gas - Prices Slip Despite Prospects For Stronger Demand
DJ Natural Gas Slips Despite Prospects for Stronger Demand
By Timothy Puko
Natural gas slipped Tuesday morning despite colder-weather forecasts suggesting stronger demand is on the way late
this month.
Analysts attributed the move to oil's fall and larger bearish trends in the gas market. Some energy traders have
been liquidating their gas holdings in recent weeks as oil has plummeted to a five-year low, analysts and brokers have
said. Even the cold weather on the way could be coming too late for enough heating demand to absorb the record supply
of U.S. natural gas, analysts said.
"There's just a pile up of reasons not to" buy big, said Teri Viswanath, a natural-gas strategist at BNP Paribas SA
in New York.
Natural gas for January delivery is down 8.5 cents, or 2.3%, at $3.634 a million British thermal units on the New
York Mercantile Exchange. The price is back down to within 7 cents of the seven-week low from Dec. 8.
December's first wave of below-normal temperatures is likely to hit Chicago and the East Coast by Dec. 27, Commodity
Weather Group said. But the demand outlook isn't clearly bullish because above-normal temperatures are still covering
half or more of the country through the next 10 days.
"It appears that this market could remain trapped in a choppy/sideways (trading) pattern through the rest of this
year," analyst Jim Ritterbusch said in a note to clients.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.5475/mmBtu, compared with Monday's
range of $3.6225-$3.7025. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $3.63/mmBtu to
$3.67/mmBtu, compared with Monday's range of $3.70 to $3.76.
Write to Timothy Puko attim.puko@wsj.com
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(END) Dow Jones Newswires
December 16, 2014 09:42 ET (14:42 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121614 14:42 -- GMT
------
By Timothy Puko
Natural gas slipped Tuesday morning despite colder-weather forecasts suggesting stronger demand is on the way late
this month.
Analysts attributed the move to oil's fall and larger bearish trends in the gas market. Some energy traders have
been liquidating their gas holdings in recent weeks as oil has plummeted to a five-year low, analysts and brokers have
said. Even the cold weather on the way could be coming too late for enough heating demand to absorb the record supply
of U.S. natural gas, analysts said.
"There's just a pile up of reasons not to" buy big, said Teri Viswanath, a natural-gas strategist at BNP Paribas SA
in New York.
Natural gas for January delivery is down 8.5 cents, or 2.3%, at $3.634 a million British thermal units on the New
York Mercantile Exchange. The price is back down to within 7 cents of the seven-week low from Dec. 8.
December's first wave of below-normal temperatures is likely to hit Chicago and the East Coast by Dec. 27, Commodity
Weather Group said. But the demand outlook isn't clearly bullish because above-normal temperatures are still covering
half or more of the country through the next 10 days.
"It appears that this market could remain trapped in a choppy/sideways (trading) pattern through the rest of this
year," analyst Jim Ritterbusch said in a note to clients.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.5475/mmBtu, compared with Monday's
range of $3.6225-$3.7025. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $3.63/mmBtu to
$3.67/mmBtu, compared with Monday's range of $3.70 to $3.76.
Write to Timothy Puko attim.puko@wsj.com
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(END) Dow Jones Newswires
December 16, 2014 09:42 ET (14:42 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121614 14:42 -- GMT
------
Natural Gas Technical Update - Rally Failure On Monday - Bears Back In Control
An early bounce on Monday had the January 15 natural gas contract higher by nearly .140ion the overnight session. But the early strength was short-lived as sellers came back in dropping the market lower into the close.
The January contract finished the session with a .076 loss (2%) settling at 3.719.
10 day moving average support at 3.705 has been broken today turning the near term trend back down as the January contract trades back toward the lower-3.600 level.
Last week’s 3.585 low extending down to the 3.541 low set in late-October remains primary support. A drop under 3.541 would turn the late-2013 weekly lows at 3.380-3.400 into the next downside support area.
The 10 day moving average now becomes resistance at 3.705 followed by the 3.936 high set on Monday.
Bottom line – The bears back in control to see if they can push the market under 3.541-4.585 weekly low support.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Crude Oil Technical Update - Market Remains Amazingly Weak
No signs of a near term low in the crude oil market as it remains in a steep downtrend falling to new multi-year low almost daily.
After losing 12.1% in last week’s trade, the January 15 crude oil contract fell by an additional 1.90 or 3.2% on Monday closing the day at a new 5 ½ year low of 55.91.
The market is down again in today’s early trade with a current 53.60 overnight low. With 54.00-55.00 weekly low support broken, the next support is between 50.00-50.50.
The downside objective for this current downtrend is for a retest of a trend line support on the weekly chart between 45.00-47.00. This is a 16-year trend line tested on three previous occasions the latest being December 2008 when the market bottomed out at a 32.40 low.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Monday, December 15, 2014
NIce Timing On The Energy "Boom" Wells Fargo
And it couldn't happen to a bigger bunch of crooks. Outside of Goldman Sachs, Merrill Lynch, Citigroup, Morgan Stanley. Oh, never mind.
http://articles.chicagotribune.com/2014-07-11/business/sns-rt-us-wells-fargo-results-energy-20140711_1_energy-sector-u-s-energy-boom-energy-companies
http://articles.chicagotribune.com/2014-07-11/business/sns-rt-us-wells-fargo-results-energy-20140711_1_energy-sector-u-s-energy-boom-energy-companies
Natural Gas Corner - Market Review - Down But Not Yet Out
Natural gas prices pulled back in today's trade as weather-related demand stills looks to be low for December and production continues to reach new all-time highs.
The latest 6-10 day NWS shows above-normal temperatures across much of the upper U.S. with normal or below-normal for the remaining parts. With the high usage northern part of the U.S. forecasts calling for above-normal temperatures, it is difficult to garner much buying enthusiasm for the market.
Last week's 51 Bcf storage draw was near the upper end of pre-report estimates but 21 below the 5-year average draw and 41 Bcf below last year's withdrawal. Adding to further bearishness in the storage complex is last year's withdrawals during December which were 256 and 193 over the upcoming two weeks.
Production is another bearish factor as it continues to climb to new all-time highs. November production of dry gas reached a new high of 72.8 Bcf per day, a 1 Bcf jump from the previous month. September 2014 dry gas production in the U.S. is 4.6 Bcf per day higher than September 2013 according to recent EIA reports.
Current storage of 3,359 Bcf is 9.5% below the 5-year average. But with increased production and lower demand, the deficit is expected to narrow possibly to zero by early-2015.
Weather forecast can change in very short order as witnessed in early-2014 as the spot market price rallied higher by 45% in just 3 weeks of trade. Until the forecasts do change, the market should remain range bound near recent lows.
One interesting note is the hedge fund long position which last week fell to 134,679 contracts (futures only), down 17,073 from the previous week according to the latest Commitment of Trader's report.
The last time the speculative long position by the funds was as low as it current is was last January as the market was bottoming ahead of the winter rally. A bullish contrarian indicator?
The latest 6-10 day NWS shows above-normal temperatures across much of the upper U.S. with normal or below-normal for the remaining parts. With the high usage northern part of the U.S. forecasts calling for above-normal temperatures, it is difficult to garner much buying enthusiasm for the market.
Last week's 51 Bcf storage draw was near the upper end of pre-report estimates but 21 below the 5-year average draw and 41 Bcf below last year's withdrawal. Adding to further bearishness in the storage complex is last year's withdrawals during December which were 256 and 193 over the upcoming two weeks.
Production is another bearish factor as it continues to climb to new all-time highs. November production of dry gas reached a new high of 72.8 Bcf per day, a 1 Bcf jump from the previous month. September 2014 dry gas production in the U.S. is 4.6 Bcf per day higher than September 2013 according to recent EIA reports.
Current storage of 3,359 Bcf is 9.5% below the 5-year average. But with increased production and lower demand, the deficit is expected to narrow possibly to zero by early-2015.
Weather forecast can change in very short order as witnessed in early-2014 as the spot market price rallied higher by 45% in just 3 weeks of trade. Until the forecasts do change, the market should remain range bound near recent lows.
One interesting note is the hedge fund long position which last week fell to 134,679 contracts (futures only), down 17,073 from the previous week according to the latest Commitment of Trader's report.
The last time the speculative long position by the funds was as low as it current is was last January as the market was bottoming ahead of the winter rally. A bullish contrarian indicator?
Winter 15/Summer 15 Natural Gas Spread Still Holding Above Trend Line Support
The winter 15/summer 15 natural gas spread has narrowed sharply as the natural gas market last week fell to new 2014 and in many cases all-time price lows.
But the spread still remains above trend line support shown in red and could be a bullish indicator for the market moving forward.
But the spread still remains above trend line support shown in red and could be a bullish indicator for the market moving forward.
Dow Jones End of Day Commentary - Natural Gas Drops On Short-Term Weather Forecast
DJ Natural Gas Drops on Short-Term Weather Forecast
By Timothy Puko
Natural-gas prices ended lower after a strong start Monday, with analysts saying near-term weather forecasts are
still too warm to overcome record supply.
The front-month January contract settled down 7.6 cents, or 2%, at $3.719 a million British thermal units on the New
York Mercantile Exchange. Prices started the session immediately higher, opening at $3.843/mmBtu, and then steadily
retreated, losing 3.2% between the open Sunday evening and the close Monday afternoon.
The U.S. oil and gas boom has led to record supply outpacing growth in demand. Demand is largely dependent on home
heating, and weather forecasters are still expecting above-normal temperatures through Christmas. That has traders
expecting supply to keep outpacing demand, driving prices down, analysts said.
--Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 15, 2014 14:52 ET (19:52 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121514 19:52 -- GMT
------
By Timothy Puko
Natural-gas prices ended lower after a strong start Monday, with analysts saying near-term weather forecasts are
still too warm to overcome record supply.
The front-month January contract settled down 7.6 cents, or 2%, at $3.719 a million British thermal units on the New
York Mercantile Exchange. Prices started the session immediately higher, opening at $3.843/mmBtu, and then steadily
retreated, losing 3.2% between the open Sunday evening and the close Monday afternoon.
The U.S. oil and gas boom has led to record supply outpacing growth in demand. Demand is largely dependent on home
heating, and weather forecasters are still expecting above-normal temperatures through Christmas. That has traders
expecting supply to keep outpacing demand, driving prices down, analysts said.
--Write to Timothy Puko at tim.puko@wsj.com
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>
(END) Dow Jones Newswires
December 15, 2014 14:52 ET (19:52 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121514 19:52 -- GMT
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Dow Jones Natural Gas - Mixed Forecasts Impacting Prices
DJ Natural Gas Goes Up and Down on Mixed Weather Forecasts
By Timothy Puko
Natural gas gains are tapering Monday morning as volatile weather reports have divided the market.
Natural gas for January delivery is up 2.3 cents, or 0.6%, at $3.818 a million British thermal units on the New York
Mercantile Exchange. Nearly all those gains came as soon as electronic trading opened Sunday evening, with the market
drifting lower from there.
Weather forecasts have played a big role. Several are showing a burst of unseasonably cold weather spreading across
the country after Christmas and have also pulled back on predictions of unseasonably warm temperatures through the next
10 days.
Half of all U.S. homes use gas for heating, making winter the peak season for demand. Traders often bid up the price
on signs that cold weather could lead to strong heating demand.
The market had been sinking for most of the past three weeks on predictions for unseasonably warm weather and
expectations for soft demand. Most of the country is still likely to see temperatures 2- to 8-degrees-Fahrenheit above
normal this week, and that is dragging prices back down despite the early gains, analysts and a trader said.
Big price swings are often part of trading to open the week, said Scott Gettleman, an independent trader in New York.
If someone has a big order to fill, it can have an outsized influence during light trading, even more than the
fluctuating weather forecasts, he said.
"I wouldn't put a lot of stock in (the weather's influence today) because it's illiquid and anything can happen when
someone has contracts to buy," Mr. Gettleman said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.635/mmBtu, compared with Friday's
range of $3.55-$3.60. Cash prices at the Transco Z6 hub in New York last traded at $3.70/mmBtu, compared with Friday's
range of $3.60 to $3.80.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 15, 2014 09:40 ET (14:40 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121514 14:40 -- GMT
------
By Timothy Puko
Natural gas gains are tapering Monday morning as volatile weather reports have divided the market.
Natural gas for January delivery is up 2.3 cents, or 0.6%, at $3.818 a million British thermal units on the New York
Mercantile Exchange. Nearly all those gains came as soon as electronic trading opened Sunday evening, with the market
drifting lower from there.
Weather forecasts have played a big role. Several are showing a burst of unseasonably cold weather spreading across
the country after Christmas and have also pulled back on predictions of unseasonably warm temperatures through the next
10 days.
Half of all U.S. homes use gas for heating, making winter the peak season for demand. Traders often bid up the price
on signs that cold weather could lead to strong heating demand.
The market had been sinking for most of the past three weeks on predictions for unseasonably warm weather and
expectations for soft demand. Most of the country is still likely to see temperatures 2- to 8-degrees-Fahrenheit above
normal this week, and that is dragging prices back down despite the early gains, analysts and a trader said.
Big price swings are often part of trading to open the week, said Scott Gettleman, an independent trader in New York.
If someone has a big order to fill, it can have an outsized influence during light trading, even more than the
fluctuating weather forecasts, he said.
"I wouldn't put a lot of stock in (the weather's influence today) because it's illiquid and anything can happen when
someone has contracts to buy," Mr. Gettleman said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.635/mmBtu, compared with Friday's
range of $3.55-$3.60. Cash prices at the Transco Z6 hub in New York last traded at $3.70/mmBtu, compared with Friday's
range of $3.60 to $3.80.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 15, 2014 09:40 ET (14:40 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121514 14:40 -- GMT
------
Natural Gas Technical Update - Bullish Reversal In Last Week's Trade
The natural gas market began last week’s trade sharply lower with the January 15 contract falling 5.4% in Monday’s session bottoming out at a 3.585 contract low.
The weakness didn’t last as by Friday’s close the January contract has traded back where is began the week settling at 3.795, down just 7 ticks.
Friday’s settle also can above the 10 day moving average which could be further confirmation a market low has been set.
Last week’s 3.585 low was technically important as it held above the previous spot contract low of 3.541 posted in late-October. The inability to drop the market to a new spot low was a warning sign the downtrend may be ending.
With 10 day moving average resistance broken, the near term trend is now up with the 10 day average becoming primary support today at 3.740. A close back under the 10 day average would turn the momentum back to the downside.
The overnight 3.936 high is the first area of resistance followed by 4.045-4.050. The second area of resistance is former daily low support as well as the 40 day moving average. A breakout above this resistance level would very bullish for the market.
Friday’s Commitment of Trader’s report showed heavy fund liquidation for a second week. The funds are currently long 134,679 contracts (futures only), down 17,073 from the previous week. The fund long position is at the lowest level since January 2014 when the winter rally was just beginning. A contrarian bullish indicator?
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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