DJ Natural Gas Losing Streak Hits Fifth Session
By Timothy Puko
Natural-gas prices are falling Friday as the market keeps absorbing data from Thursday that suggested a larger glut
of gas than expected.
Natural gas for July delivery fell 3.8 cents, or 1.4%, at $2.668 a million British thermal units on the New York
Mercantile Exchange. Gas has lost ground every day this week and has fallen nearly 12% since it closed at a four-month
high on May 15.
The worst of those losses came Thursday when U.S. inventory data showed supplies rose 112 billion cubic feet last
week, 13% more than expected. That suggests the market was oversupplied by 2 bcf to 3 bcf a day last week, or about 3%
of production, Tudor, Pickering, Holt & Co., an energy investment bank in Houston, said in a note on Friday.
The data vindicates many traders and analysts who warned that early May's bull run was overly optimistic. Production
is still at near-record levels, and boosts to demand appear temporary. Hot weather that drove demand for gas-fired
power to run air conditioners is receding, and nuclear-power plants that shutdown because of damage or maintenance are
coming back online, cutting into the power sector's gas consumption. Many believe that gas production has leveled off
from last year's rampant growth, but it could be months before that translates into a more balanced market.
"It looks like all the (sellers) might turn out to be right," said Scott Gettleman, an independent trader in New
York. "Everything points lower."
Gas did briefly make gains in electronic trading early Friday, likely from bearish betters cashing out and taking
profits after Thursday's losses, Mr. Gettleman said. The fact that gas didn't get more of a rebound from those traders
or from bargain-seeking buyers signals prices could fall even further by the end of Friday's session, Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.63/mmBtu, compared with Thursday's
range of $2.71-$2.785. Cash prices at the Transco in New York traded in a bid-ask range of $2.25/mmBtu to $2.38/mmBtu,
compared with Thursday's range of $1.85 to $2.35.
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(END) Dow Jones Newswires
May 29, 2015 09:54 ET (13:54 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052915 13:54 -- GMT
------
natural gas
Friday, May 29, 2015
Natural Gas Corner - Technical Update - How Low Can It Go?
The natural gas market lost nearly 5% in Thursday as the spot July 15 contract closed under 40 day moving average support which turns the market trend back down.
Prior the recent selling, the July contract had gained 24% from the late-April 2.540 contract low up to last week's 3.150 high. But over the past 6 sessions, nearly 75% of those gains have now been erased.
The July contract closed Thursday at 2.706, down .141 for the day. Selling has continued overnight dropping the July contract under Thursday's 2.700 low as support which turns 2.580-2.590 into the next downside support level.
The 2.722 overnight high is the first area of resistance today followed by the 40 day moving average currently at 2.790. As long as the July contract trades under the 40 day average, the trend will remain down.
Current weakness may or may not lead to a new contract low. If the 2.540 contract low set in April is not broken as support on this downtrend, it could be an important low for the market.
Technical Indicators: Moving Average Alignment - Neutral-Bearish
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bearish
Thursday, May 28, 2015
Natural Gas Corner - Market Update - Bulls Get Gored In Today's Trade
Natural gas prices cratered in today's trade as the spot July 15 contract fell by nearly 5% following release of the weekly EIA storage report.
The spot market is now down just over 14% in just 6 trading days as weather forecasts moderate and long position holders run for the exit.
Today's 112 Bcf storage build came 13 Bcf above the average analysts' guesstimate for 99 Bcf injection which led to heavy selling. Key technical support was broken on the sell off possibly leading to new price lows in upcoming trade.
Storage builds over the first 8 weeks of the injection season have exceeded the 5-year average each week with storage injections totaling 640 Bcf, 172 Bcf or 37% above the 5-year average. The deficit of gas currently in storage relative to the 5-year average during this time frame has narrowed from 6.5% to just .7%.
Weather forecasts have also moderated suggesting another cooler than normal summer lowering weather-related demand for natural gas.
While there could be another summer weather rally, the market appears ready to set new lows over upcoming weeks of trade.
Current weakness is an excellent opportunity to add to longer dated coverage particularly for 2016 and 2017 at historically low prices.
The spot market is now down just over 14% in just 6 trading days as weather forecasts moderate and long position holders run for the exit.
Today's 112 Bcf storage build came 13 Bcf above the average analysts' guesstimate for 99 Bcf injection which led to heavy selling. Key technical support was broken on the sell off possibly leading to new price lows in upcoming trade.
Storage builds over the first 8 weeks of the injection season have exceeded the 5-year average each week with storage injections totaling 640 Bcf, 172 Bcf or 37% above the 5-year average. The deficit of gas currently in storage relative to the 5-year average during this time frame has narrowed from 6.5% to just .7%.
Weather forecasts have also moderated suggesting another cooler than normal summer lowering weather-related demand for natural gas.
While there could be another summer weather rally, the market appears ready to set new lows over upcoming weeks of trade.
Current weakness is an excellent opportunity to add to longer dated coverage particularly for 2016 and 2017 at historically low prices.
Dow Jones Natural Gas - End of Day Commentary
DJ Natural Gas Futures Slide as Supplies Jump
By Christian Berthelsen
Natural gas futures suffered their largest one-day drop in more than two months on Thursday as U.S. inventory data
showed supplies rose more than expected last week.
The natural gas market had been chugging higher earlier in May as above-normal spring temperatures fueled
expectations of higher demand for gas-fired generation to power air conditioning. But Thursday's data showed that even
elevated demand wasn't enough to overcome surging gas production from U.S. shale formations.
The U.S. Energy Information Administration said national gas stockpiles rose 112 billion cubic feet in the week ended
May 22, compared with the 99 bcf rise projected in a consensus estimate of analysts surveyed by The Wall Street
Journal. The increase brought total stored supplies to 2.1 trillion cubic feet, less than 1% below average for this
time of year, as the market has almost fully recovered from the severe drawdown to power gas-fired heating demand
during the harsh 2013-14 winter.
Natural gas for July finished the day down 14.1 cents, or 5%, at $2.706 a million British thermal units, its lowest
settlement since April 29 and its largest one-day drop since March 9. The front-month contract fell for the fourth
straight session and has now given back more than 10% since its recent peak in mid-May.
"Inventory blew away expectations," said Phil Flynn, account executive at Chicago futures brokerage Price Futures
Group. "The market was anticipating stronger demand because of the heat, and it didn't materialize."
The most recent forecasts suggest weather-driven demand may continue to fizzle. A recent heat wave in the Northeast
is fading, and outlooks for high temperatures into mid-June are losing strength. Forecaster Commodity Weather Group
predicted "another slight drop-off in forecast demand over the next two weeks."
FUTURES SETTLEMENT NET CHANGE
Nymex June $2.706 -14.1c
Nymex July $2.730 -13.5c
Nymex August $2.738 -13.2c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.43-$2.48 $2.5525-$2.62
El Paso SJ $2.45-$2.47 $2.56-$2.61
Henry Hub $2.71-$2.785 $2.80-$2.86
Katy $2.655-$2.73 $2.74-$2.80
SoCal $2.56-$2.58 $2.71-$2.725
Tex East M3 $1.35-$1.48 $1.54-$1.64
Transco 65 $2.6975-$2.76 $2.75-$2.83
Transco Z6 $1.85-$2.35 $2.80-$2.915
Waha $2.57-$2.58 $2.64-$2.70
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(END) Dow Jones Newswires
May 28, 2015 15:45 ET (19:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052815 19:45 -- GMT
------
By Christian Berthelsen
Natural gas futures suffered their largest one-day drop in more than two months on Thursday as U.S. inventory data
showed supplies rose more than expected last week.
The natural gas market had been chugging higher earlier in May as above-normal spring temperatures fueled
expectations of higher demand for gas-fired generation to power air conditioning. But Thursday's data showed that even
elevated demand wasn't enough to overcome surging gas production from U.S. shale formations.
The U.S. Energy Information Administration said national gas stockpiles rose 112 billion cubic feet in the week ended
May 22, compared with the 99 bcf rise projected in a consensus estimate of analysts surveyed by The Wall Street
Journal. The increase brought total stored supplies to 2.1 trillion cubic feet, less than 1% below average for this
time of year, as the market has almost fully recovered from the severe drawdown to power gas-fired heating demand
during the harsh 2013-14 winter.
Natural gas for July finished the day down 14.1 cents, or 5%, at $2.706 a million British thermal units, its lowest
settlement since April 29 and its largest one-day drop since March 9. The front-month contract fell for the fourth
straight session and has now given back more than 10% since its recent peak in mid-May.
"Inventory blew away expectations," said Phil Flynn, account executive at Chicago futures brokerage Price Futures
Group. "The market was anticipating stronger demand because of the heat, and it didn't materialize."
The most recent forecasts suggest weather-driven demand may continue to fizzle. A recent heat wave in the Northeast
is fading, and outlooks for high temperatures into mid-June are losing strength. Forecaster Commodity Weather Group
predicted "another slight drop-off in forecast demand over the next two weeks."
FUTURES SETTLEMENT NET CHANGE
Nymex June $2.706 -14.1c
Nymex July $2.730 -13.5c
Nymex August $2.738 -13.2c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.43-$2.48 $2.5525-$2.62
El Paso SJ $2.45-$2.47 $2.56-$2.61
Henry Hub $2.71-$2.785 $2.80-$2.86
Katy $2.655-$2.73 $2.74-$2.80
SoCal $2.56-$2.58 $2.71-$2.725
Tex East M3 $1.35-$1.48 $1.54-$1.64
Transco 65 $2.6975-$2.76 $2.75-$2.83
Transco Z6 $1.85-$2.35 $2.80-$2.915
Waha $2.57-$2.58 $2.64-$2.70
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(END) Dow Jones Newswires
May 28, 2015 15:45 ET (19:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052815 19:45 -- GMT
------
Dow Jones Natural Gas - Post-EIA Report Commentary
DJ Natural Gas Sells Off Sharply as Supply Growth Surges
By Christian Berthelsen
Natural gas futures sold off sharply Thursday after U.S. stockpiles grew more than expected.
The market was already trading lower as heat wave forecasts faded and expectations for gas-fired cooling demand
weakened. But the losses deepened after the U.S. Energy Information Administration reported gas stockpiles grew by 112
billion cubic feet in the week ended May 22, compared with the 99 bcf increase projected by analysts surveyed by The
Wall Street Journal.
Natural gas for the new front-month July contract recently traded down 13.5 cents, or 4.6%, at $2.7130 a million
British thermal units on the New York Mercantile Exchange, on track for their fourth straight losing session. Futures
have lost more than 10% since their recent peak in the middle of May, as robust gas production continues to replenish
inventories in spite of early season above-normal temperatures that have driven demand.
Total U.S. gas inventories now stand at 2.1 trillion cubic feet, less than 1% below average for this time of year.
That means the U.S. has almost finally recovered from the sharp supply drawdown brought on by heating demand during the
2013-14 winter.
"Production is still really strong," said Gene McGillian, senior analyst at futures brokerage Tradition Energy in
Stamford, Conn. "People are starting to focus again on the fact that production is expected to climb back to record
levels, while we have mild seasonal demand."
Forecaster Commodity Weather Group predicted "another slight drop-off in forecast demand over the next two weeks," as
a Northeastern heat wave eased in the coming days and the outlook for continued above-normal temperatures in the region
into mid-June appeared less likely.
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(END) Dow Jones Newswires
May 28, 2015 11:06 ET (15:06 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052815 15:06 -- GMT
------
By Christian Berthelsen
Natural gas futures sold off sharply Thursday after U.S. stockpiles grew more than expected.
The market was already trading lower as heat wave forecasts faded and expectations for gas-fired cooling demand
weakened. But the losses deepened after the U.S. Energy Information Administration reported gas stockpiles grew by 112
billion cubic feet in the week ended May 22, compared with the 99 bcf increase projected by analysts surveyed by The
Wall Street Journal.
Natural gas for the new front-month July contract recently traded down 13.5 cents, or 4.6%, at $2.7130 a million
British thermal units on the New York Mercantile Exchange, on track for their fourth straight losing session. Futures
have lost more than 10% since their recent peak in the middle of May, as robust gas production continues to replenish
inventories in spite of early season above-normal temperatures that have driven demand.
Total U.S. gas inventories now stand at 2.1 trillion cubic feet, less than 1% below average for this time of year.
That means the U.S. has almost finally recovered from the sharp supply drawdown brought on by heating demand during the
2013-14 winter.
"Production is still really strong," said Gene McGillian, senior analyst at futures brokerage Tradition Energy in
Stamford, Conn. "People are starting to focus again on the fact that production is expected to climb back to record
levels, while we have mild seasonal demand."
Forecaster Commodity Weather Group predicted "another slight drop-off in forecast demand over the next two weeks," as
a Northeastern heat wave eased in the coming days and the outlook for continued above-normal temperatures in the region
into mid-June appeared less likely.
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(END) Dow Jones Newswires
May 28, 2015 11:06 ET (15:06 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052815 15:06 -- GMT
------
EIA Weekly Storage Report - 112 Bcf Injection - Look Out Below!
For the week ended May 22:
EIA Injection - 112 BCF
Last Year's Injection - 113 BCF
5 Yr Avg Injection - 95 BCF
Range of Estimates - 87 BCF to 107 BCF
Avg Estimate - 99 BCF
Total Gas in Storage - 2.101 TCF
EIA Injection - 112 BCF
Last Year's Injection - 113 BCF
5 Yr Avg Injection - 95 BCF
Range of Estimates - 87 BCF to 107 BCF
Avg Estimate - 99 BCF
Total Gas in Storage - 2.101 TCF
Dow Jones Natural Gas - Morning Commentary
DJ Natural Gas Extends Losses as Cooling Demand Outlook Fades
By Christian Berthelsen
Natural gas futures were on track for their fourth straight losing session on Thursday, as heat wave forecasts faded
and expectations for gas-fired cooling demand weakened.
Natural gas for the new front-month July contract was down 3.4 cents, or 1.2%, at $2.8130 a million British thermal
units on the New York Mercantile Exchange, approaching their lowest levels in nearly three weeks. Futures have lost
about 7% since their recent peak in the middle of May, as robust gas production continues to replenish inventories in
spite of early season above-normal temperatures that have driven demand.
The U.S. Energy Department is set to release weekly inventory data at 10:30 a.m. ET. Analysts surveyed by The Wall
Street Journal anticipate an increase of 99 billion cubic feet in the week ended May 22, slightly above the 95 bcf
average for this time of year. Still, if the projection proves accurate, total inventories would reach 2.1 trillion
cubic feet, just 1.6% below average for this time of year, as the U.S. continues to replenish stockpiles that shrank
during the winter.
"If cooling-related demand does not arrive in a strong way, the current robust supply situation will then result in a
drag on prices going forward," analyst Dominick Chirichella of consultancy Energy Market Institute said in a note.
Forecaster Commodity Weather Group predicted "another slight drop-off in forecast demand over the next two weeks," as
a Northeastern heat wave eased in the coming days and the outlook for continued above-normal temperatures in the region
into mid-June appeared less likely.
In the cash market for next-day delivery of physical gas, prices at key regional U.S. hubs were below the prior-day
range. The benchmark Henry Hub last traded at $2.7750 a million Btus, compared with Wednesday's range of $2.80-$2.86.
The Transco Z6 hub in New York traded in a bid-offer range of $2.00-$2.65, compared $2.80-$2.915 the day before.
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(END) Dow Jones Newswires
May 28, 2015 09:12 ET (13:12 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052815 13:12 -- GMT
------
By Christian Berthelsen
Natural gas futures were on track for their fourth straight losing session on Thursday, as heat wave forecasts faded
and expectations for gas-fired cooling demand weakened.
Natural gas for the new front-month July contract was down 3.4 cents, or 1.2%, at $2.8130 a million British thermal
units on the New York Mercantile Exchange, approaching their lowest levels in nearly three weeks. Futures have lost
about 7% since their recent peak in the middle of May, as robust gas production continues to replenish inventories in
spite of early season above-normal temperatures that have driven demand.
The U.S. Energy Department is set to release weekly inventory data at 10:30 a.m. ET. Analysts surveyed by The Wall
Street Journal anticipate an increase of 99 billion cubic feet in the week ended May 22, slightly above the 95 bcf
average for this time of year. Still, if the projection proves accurate, total inventories would reach 2.1 trillion
cubic feet, just 1.6% below average for this time of year, as the U.S. continues to replenish stockpiles that shrank
during the winter.
"If cooling-related demand does not arrive in a strong way, the current robust supply situation will then result in a
drag on prices going forward," analyst Dominick Chirichella of consultancy Energy Market Institute said in a note.
Forecaster Commodity Weather Group predicted "another slight drop-off in forecast demand over the next two weeks," as
a Northeastern heat wave eased in the coming days and the outlook for continued above-normal temperatures in the region
into mid-June appeared less likely.
In the cash market for next-day delivery of physical gas, prices at key regional U.S. hubs were below the prior-day
range. The benchmark Henry Hub last traded at $2.7750 a million Btus, compared with Wednesday's range of $2.80-$2.86.
The Transco Z6 hub in New York traded in a bid-offer range of $2.00-$2.65, compared $2.80-$2.915 the day before.
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(END) Dow Jones Newswires
May 28, 2015 09:12 ET (13:12 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052815 13:12 -- GMT
------
Natural Gas Corner - Technical Update - Key Technical Test Today For The Natural Gas Market
Today will be another important technical test for the natural gas market which has stabilized over the past 2 sessions following 5 days of relentless selling.
After topping out at an 11-week high last week, the natural gas market has been in a steep correction erasing roughly half the 25% gains made over the previous 4 weeks.
The spot July 15 contract has found interest just above the 40 day moving average at the 2.795 level today. This support has held the past 2 days and could be an area from which the market reverses back higher.
However, if support fails to hold today, the market could be heading back toward new price lows.
If 2.795 support is broken, 2.730-2.740 will become the next downside support followed by 2.580-2.590.
A close back above the 10 day moving average currently at 2.955 is needed to turn the near term trend back higher. If this occurs, the 3.020-3.040 and last week's 3.150 high will become the next upside objectives.
Technical Indicators: Moving Average Alignment - Neutral
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bearish
Wednesday, May 27, 2015
Natural Gas Corner - Market Review - Bearish Fundamental Factors Increasing
Natural gas prices traded flat today during expiration of the June 15 contract following 5 days of heavy selling which erased roughly half the gains made over the previous 4 weeks.
Near term weather remains supportive but the longer range forecasts for June and July are not as they show large pockets of below-normal temperatures across the Midwest and Texas, both heavy users of natural gas for power generation.
Storage injections over the past 7 weeks have also been historically large totaling 528 Bcf, 42% higher than the 5-year average.
Production may begin to fall later this year but has so far remained unaffected by the sharp drop in the natural gas rig count which at 222 hovers just above an all-time low.
Weather is bearish, storage has been bearish and production is bearish. So why did natural gas prices rally higher by nearly 25% over the past month. That answer is short-covering and new speculative fund buying.
The conditions that exist today in the market were as bearish in late-April as the market fell to a near 4 year low. But when nearly everyone is expecting the same overcome (ie: lower prices), the results can be quite surprising as they have been in the natural gas market. What began as a short-covering rally with short position holders buying to offset positions soon turned into new speculative buying as investors poured money into the market as it rose attempting to play the summer weather rally which drove the market even higher.
But the market may have gotten ahead of itself as overall fundamentals remain bearish with little weather related demand evident as shown by the large storage injections.
The natural gas market may turn back higher near term if tomorrow's EIA storage report comes in lower than the 99 Bcf injection expected. But over the next few months. new price lows are likely to be set in the market.
Near term weather remains supportive but the longer range forecasts for June and July are not as they show large pockets of below-normal temperatures across the Midwest and Texas, both heavy users of natural gas for power generation.
Storage injections over the past 7 weeks have also been historically large totaling 528 Bcf, 42% higher than the 5-year average.
Production may begin to fall later this year but has so far remained unaffected by the sharp drop in the natural gas rig count which at 222 hovers just above an all-time low.
Weather is bearish, storage has been bearish and production is bearish. So why did natural gas prices rally higher by nearly 25% over the past month. That answer is short-covering and new speculative fund buying.
The conditions that exist today in the market were as bearish in late-April as the market fell to a near 4 year low. But when nearly everyone is expecting the same overcome (ie: lower prices), the results can be quite surprising as they have been in the natural gas market. What began as a short-covering rally with short position holders buying to offset positions soon turned into new speculative buying as investors poured money into the market as it rose attempting to play the summer weather rally which drove the market even higher.
But the market may have gotten ahead of itself as overall fundamentals remain bearish with little weather related demand evident as shown by the large storage injections.
The natural gas market may turn back higher near term if tomorrow's EIA storage report comes in lower than the 99 Bcf injection expected. But over the next few months. new price lows are likely to be set in the market.
Dow Jones Natural Gas - End of Day Commentary
DJ Natural Gas Divided Between Oversupply and Speculators' Maneuvering
By Timothy Puko
Natural gas prices fell slightly Wednesday in seesaw trading divided between oversupply concerns and speculators
maneuvering around the June contract's expiration.
Prices for the front-month June contract lost 0.7 cent, or 0.2%, to $2.815 a million British thermal units on the New
York Mercantile Exchange. Gas has now fallen in six of the past seven sessions, closing Wednesday at a fresh two-week
low.
The June contract expired at close. The July contract was more actively traded, losing 0.2 cent, or 0.1%, to settled
at $2.847/mmBtu.
"It really has been a dead expiration (day)," said Kyle Cooper, managing director of research at IAF Advisors, a
Houston consulting firm.
Demand has tapered off, in part from the Memorial Day holiday and in part from nuclear power plants ramping up in
recent days taking back a larger share of the power market, Mr. Cooper and other analysts said. And natural gas is
still dealing with a near-record supply in a low-demand season, so prices are primed to fall.
Prices held up close to unchanged largely because many bears cashed out to lock in profits after the recent run of
losing sessions, analysts said. The market has been flooded with bearish traders and many were also likely buying back
June contracts to close out those bets in order to roll them over to July, Jim Ritterbusch, president of
energy-advisory firm Ritterbusch & Associates, said in a note.
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(END) Dow Jones Newswires
May 27, 2015 15:17 ET (19:17 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052715 19:17 -- GMT
------
By Timothy Puko
Natural gas prices fell slightly Wednesday in seesaw trading divided between oversupply concerns and speculators
maneuvering around the June contract's expiration.
Prices for the front-month June contract lost 0.7 cent, or 0.2%, to $2.815 a million British thermal units on the New
York Mercantile Exchange. Gas has now fallen in six of the past seven sessions, closing Wednesday at a fresh two-week
low.
The June contract expired at close. The July contract was more actively traded, losing 0.2 cent, or 0.1%, to settled
at $2.847/mmBtu.
"It really has been a dead expiration (day)," said Kyle Cooper, managing director of research at IAF Advisors, a
Houston consulting firm.
Demand has tapered off, in part from the Memorial Day holiday and in part from nuclear power plants ramping up in
recent days taking back a larger share of the power market, Mr. Cooper and other analysts said. And natural gas is
still dealing with a near-record supply in a low-demand season, so prices are primed to fall.
Prices held up close to unchanged largely because many bears cashed out to lock in profits after the recent run of
losing sessions, analysts said. The market has been flooded with bearish traders and many were also likely buying back
June contracts to close out those bets in order to roll them over to July, Jim Ritterbusch, president of
energy-advisory firm Ritterbusch & Associates, said in a note.
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(END) Dow Jones Newswires
May 27, 2015 15:17 ET (19:17 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052715 19:17 -- GMT
------
Analysts' Estimates For Tomorrow's EIA Weekly Storage Report
DJ Analysts See 99-Billion-Cubic-Feet Addition to U.S. Natural Gas Inventories
By Timothy Puko
Analysts expect government data scheduled for release Thursday to show natural gas inventories last week rose
slightly more than they usually do at that time of year.
The U.S. Energy Information Administration is expected to report that storage levels grew by 99 billion cubic feet of
gas during the week ended May 22, according to the average forecast of 15 analysts 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 May 22 week, the median estimate is for an addition of 99 bcf. Estimates range from an addition of 87 bcf to
an addition of 107 bcf.
The estimate for May 22 compares to 113 bcf added to storage for the same week last year and the 95-bcf five-year
average addition for that week.
If the storage estimate is correct, inventories as of May 22 totaled 2.1 trillion cubic feet, 53% above levels from a
year ago and 1.6% below the five-year average for the same week.
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(END) Dow Jones Newswires
May 27, 2015 13:46 ET (17:46 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052715 17:46 -- GMT
------
By Timothy Puko
Analysts expect government data scheduled for release Thursday to show natural gas inventories last week rose
slightly more than they usually do at that time of year.
The U.S. Energy Information Administration is expected to report that storage levels grew by 99 billion cubic feet of
gas during the week ended May 22, according to the average forecast of 15 analysts 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 May 22 week, the median estimate is for an addition of 99 bcf. Estimates range from an addition of 87 bcf to
an addition of 107 bcf.
The estimate for May 22 compares to 113 bcf added to storage for the same week last year and the 95-bcf five-year
average addition for that week.
If the storage estimate is correct, inventories as of May 22 totaled 2.1 trillion cubic feet, 53% above levels from a
year ago and 1.6% below the five-year average for the same week.
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(END) Dow Jones Newswires
May 27, 2015 13:46 ET (17:46 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052715 17:46 -- GMT
------
Natural Gas Corner - Technical Update - Key Support Holds On Wednesday
Since topping at a 3.150 high last Tuesday, the July 15 natural gas contract has lost .331 or 10.5% over the following 5 trading days. 1/2 of the gains made over the four previous weeks have been erased with the July contract settling Tuesday at 2.849.
One potentially bullish technical feature in yesterday's trade was the July contract holding above the 40 day moving average as support bottoming out at a 2.819 low. The 40 day moving average at 2.795 today is primary support in upcoming trade. If broken, the longer term trend will turn back down with 2.730-2.740 becoming the next downside support.
The market has reversed back higher in overnight trade as the July contract rallies up toward 2.920-2.945 resistance. A breakout above this area would turn the lower-3.000 level into the next upside resistance possibly leading to a retest of last week's 3.150 high.
The market has shaken off weak long position holders over the past 5 days of trade. Once this weakness is cleared, the market may resume the previous uptrend.
Technical Indicators: Moving Average Alignment - Neutral
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bearish
Dow Jones Natural Gas - Morning Commentary
DJ Natural Gas Divided Between Oversupply and Speculators' Maneuvering
By Timothy Puko
Natural gas prices fell Wednesday, with the market seesawing between a selloff because of oversupply and buying from
speculators who are preparing for the June contract's expiration.
Natural gas for June delivery is down 0.9 cent, or 0.3%, at $2.813 a million British thermal units on the New York
Mercantile Exchange. The gains come after natural gas has lost ground in five of the last six sessions. The June
contract expires Wednesday.
Prices have held close to unchanged because many bears are cashing out to lock in profits after the run of losing
sessions, analysts said. The market is still dealing with a near-record supply heading into a low-demand season, so the
market is primed to move lower except for pauses when speculators make these types of moves to adjust their positions,
they said.
"You had one wave (of profit-taking) go through, and it seems like that ended," Gene McGillian, an analyst at
Tradition Energy, said after floor trading opened and gas fell from gains to losses. "Now we watch and wait to see if
we get another."
Wednesday's contract expiration is likely to play a role, Jim Ritterbusch, president of energy-advisory firm
Ritterbusch & Associates, said in a note. The market has been flooded with bearish traders, and many will have to buy
back June contracts to close out those bets in order to roll them over to July, he said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.8125/mmBtu, compared with
Tuesday's range of $2.81-$2.83. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $2.85/mmBtu
to $2.95/mmBtu, compared with Tuesday's range of $2.80 to $2.95.
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(END) Dow Jones Newswires
May 27, 2015 09:45 ET (13:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052715 13:45 -- GMT
------
By Timothy Puko
Natural gas prices fell Wednesday, with the market seesawing between a selloff because of oversupply and buying from
speculators who are preparing for the June contract's expiration.
Natural gas for June delivery is down 0.9 cent, or 0.3%, at $2.813 a million British thermal units on the New York
Mercantile Exchange. The gains come after natural gas has lost ground in five of the last six sessions. The June
contract expires Wednesday.
Prices have held close to unchanged because many bears are cashing out to lock in profits after the run of losing
sessions, analysts said. The market is still dealing with a near-record supply heading into a low-demand season, so the
market is primed to move lower except for pauses when speculators make these types of moves to adjust their positions,
they said.
"You had one wave (of profit-taking) go through, and it seems like that ended," Gene McGillian, an analyst at
Tradition Energy, said after floor trading opened and gas fell from gains to losses. "Now we watch and wait to see if
we get another."
Wednesday's contract expiration is likely to play a role, Jim Ritterbusch, president of energy-advisory firm
Ritterbusch & Associates, said in a note. The market has been flooded with bearish traders, and many will have to buy
back June contracts to close out those bets in order to roll them over to July, he said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.8125/mmBtu, compared with
Tuesday's range of $2.81-$2.83. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $2.85/mmBtu
to $2.95/mmBtu, compared with Tuesday's range of $2.80 to $2.95.
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(END) Dow Jones Newswires
May 27, 2015 09:45 ET (13:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052715 13:45 -- GMT
------
Tuesday, May 26, 2015
Natural Gas Corner - Market Update - The Month In Review
Natural gas prices have again turned
back lower following a 4-week rally
which lifted the spot market higher by just over 27%. The ensuing sell off has erased roughly half
the previous 4-week gains.
Dry-gas production in late-April reached a new all-time high of 73.8 Bcf per day according to a Bentek report. Production continues to increase even with the natural gas rig count hovering near an all-time low of 222 for week ended 05-22-15 as existing wells and more efficient operations have kept total production high. At some point, possibly later this year, the declining rig count could affect production.
Storage injections also remain high with the first 7 storage injections of the 2015 injection season totaling 528 Bcf. This is 155 Bcf or 42% higher than the 5-year average. The deficit of gas currently in storage relative to the 5-year average has narrowed from 6.5% to 1.7% according to the EIA.
Summer weather forecasts have turned hotter but for the most part remain normal or slightly below normal across much of the U.S. during June and July, not particularly supportive for natural gas prices.
Seasonally, the natural gas market tends to have two annual price lows. The first price low typically forms during the months of February-April. For 2015, the post-winter price low was set on April 27th. A secondary price low later forms usually during the months of August or September. The secondary seasonal low over the past 3 and 5 years has been the lowest price level for the year and the optimal time to add to forward coverage in the market.
It is during the second expected seasonal low that coverage for winter 15-16 should be completed adding to 2016 and longer dated coverage as needed.
The market has been
supported by pockets of
above-normal temperatures along the eastern half of the U.S. Utility switchover from coal to natural gas due to lower prices and coal plant
retirements has been one of the highlights of 2015 in the natural gas market. Year-over power generator demand for natural
gas which was a record high 18.5% during
January and February has since declined to 11% during early-May but
remains a positive factor. The estimated
5-6 Bcf (billion cubic feet) per day
oversupply of natural gas in the marketplace that
existed in late-2014 has since declined to 1-2 Bcf
per day due in part to higher
utility demand.
The fund long position in the natural gas
market has nearly doubled over the past 2 weeks, but at
125,755 contracts remains well below the record high of 488,901 contracts reached
in February 2014. Funds buying has also
been and could continue to be a supportive factor for the market as they
attempt to play typical price strength during the summer months.
Dry-gas production in late-April reached a new all-time high of 73.8 Bcf per day according to a Bentek report. Production continues to increase even with the natural gas rig count hovering near an all-time low of 222 for week ended 05-22-15 as existing wells and more efficient operations have kept total production high. At some point, possibly later this year, the declining rig count could affect production.
Storage injections also remain high with the first 7 storage injections of the 2015 injection season totaling 528 Bcf. This is 155 Bcf or 42% higher than the 5-year average. The deficit of gas currently in storage relative to the 5-year average has narrowed from 6.5% to 1.7% according to the EIA.
Summer weather forecasts have turned hotter but for the most part remain normal or slightly below normal across much of the U.S. during June and July, not particularly supportive for natural gas prices.
Seasonally, the natural gas market tends to have two annual price lows. The first price low typically forms during the months of February-April. For 2015, the post-winter price low was set on April 27th. A secondary price low later forms usually during the months of August or September. The secondary seasonal low over the past 3 and 5 years has been the lowest price level for the year and the optimal time to add to forward coverage in the market.
It is during the second expected seasonal low that coverage for winter 15-16 should be completed adding to 2016 and longer dated coverage as needed.
Dow Jones Natural Gas - End of Day Commentary
DJ Natural Gas Futures Fall as Demand Outlook Weakens
By Christian Berthelsen
Natural gas futures extended losses Tuesday as forecasts for an East Coast heat wave faded, dashing expectations for
a bout of gas-fired cooling demand.
Natural gas for June delivery settled down 6.5 cents, or 2.3%, at $2.822 a million British thermal units on the New
York Mercantile Exchange. The June contract expires Wednesday.
The loss prolonged last week's slide, as concerns about robust production and more than adequate supplies prompt the
market to give back gains made in early May.
The May rally was driven by hotter-than-average temperatures that were expected to provide a boost for natural gas
demand to generate power and run air conditioning. But the most recent forecasts show that trend beginning to moderate,
with a spate of much-above normal temperatures in the Northeast fading in the coming days and predictions for renewed
heat into early June losing strength, according to forecaster Commodity Weather Group.
Soaring natural gas production has helped to almost fully restore supplies that were severely depleted by the harsh
cold of the 2013-2014 winter season. Domestic inventories are now just 1.7% below average for this time of year, and
analysts expect the market could flip to a surplus by next month. Hedge funds and other money managers remain bearish
overall on the contract, according to data from the U.S. Commodity Futures Trading Commission released Friday.
"The market needs every ounce of demand right now to combat elevated production," said Aaron Calder, an analyst with
Houston research consultancy Gelber & Associates.
FUTURES SETTLEMENT NET CHANGE
Nymex June $2.822 -6.5c
Nymex July $2.849 -7.0c
Nymex August $2.864 -7.0c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.45-$2.48 $2.48-$2.57
El Paso SJ $2.44-$2.48 $2.52-$2.56
Henry Hub $2.81-$2.83 $2.86-$2.91
Katy $2.73-$2.82 $2.81-$2.93
SoCal $2.57-$2.59 $2.68-$2.72
Tex East M3 $1.685-$1.80 $1.52-$1.625
Transco 65 $2.81-$2.85 $2.875-$2.925
Transco Z6 $2.80-$2.95 $1.88-$2.08
Waha $2.60-$2.64 $2.67-$2.69
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(END) Dow Jones Newswires
May 26, 2015 15:08 ET (19:08 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052615 19:08 -- GMT
------
By Christian Berthelsen
Natural gas futures extended losses Tuesday as forecasts for an East Coast heat wave faded, dashing expectations for
a bout of gas-fired cooling demand.
Natural gas for June delivery settled down 6.5 cents, or 2.3%, at $2.822 a million British thermal units on the New
York Mercantile Exchange. The June contract expires Wednesday.
The loss prolonged last week's slide, as concerns about robust production and more than adequate supplies prompt the
market to give back gains made in early May.
The May rally was driven by hotter-than-average temperatures that were expected to provide a boost for natural gas
demand to generate power and run air conditioning. But the most recent forecasts show that trend beginning to moderate,
with a spate of much-above normal temperatures in the Northeast fading in the coming days and predictions for renewed
heat into early June losing strength, according to forecaster Commodity Weather Group.
Soaring natural gas production has helped to almost fully restore supplies that were severely depleted by the harsh
cold of the 2013-2014 winter season. Domestic inventories are now just 1.7% below average for this time of year, and
analysts expect the market could flip to a surplus by next month. Hedge funds and other money managers remain bearish
overall on the contract, according to data from the U.S. Commodity Futures Trading Commission released Friday.
"The market needs every ounce of demand right now to combat elevated production," said Aaron Calder, an analyst with
Houston research consultancy Gelber & Associates.
FUTURES SETTLEMENT NET CHANGE
Nymex June $2.822 -6.5c
Nymex July $2.849 -7.0c
Nymex August $2.864 -7.0c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.45-$2.48 $2.48-$2.57
El Paso SJ $2.44-$2.48 $2.52-$2.56
Henry Hub $2.81-$2.83 $2.86-$2.91
Katy $2.73-$2.82 $2.81-$2.93
SoCal $2.57-$2.59 $2.68-$2.72
Tex East M3 $1.685-$1.80 $1.52-$1.625
Transco 65 $2.81-$2.85 $2.875-$2.925
Transco Z6 $2.80-$2.95 $1.88-$2.08
Waha $2.60-$2.64 $2.67-$2.69
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(END) Dow Jones Newswires
May 26, 2015 15:08 ET (19:08 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052615 19:08 -- GMT
------
Dow Jones Natural Gas - Morning Commentary
DJ Natural Gas Futures Fizzle as Heat Forecast Fades
By Christian Berthelsen
Natural gas futures slipped Tuesday as forecasts for an East Coast heat wave faded, dashing expectations for a bout
of gas-fired cooling demand.
Natural gas for June delivery was down 7.6 cents, or 2.6%, at $2.8110 a million British thermal units, the lowest
level in two weeks on the New York Mercantile Exchange. The June contract expires Wednesday.
The loss extended last week's slide for the market, which is giving back gains made in early May as concerns mount
about robust production and more than adequate supplies.
The May rally was driven by hotter-than-average temperatures that were expected to provide a boost for natural gas
demand to generate power and run air conditioning. But the most recent forecasts show that trend is beginning to
moderate, with a spate of much-above normal temperatures in the Northeast fading in the coming days and predictions for
renewed heat into early June losing strength, according to forecaster Commodity Weather Group.
"Power demand that has fueled much of the strong price advance during the first (weeks) of this month appears to have
subsided," research consultancy Ritterbusch and Associates said in a note.
Soaring natural gas production has helped to almost fully restore supplies that were severely depleted by the harsh
cold of the 2013-2014 winter. Domestic inventories are now just 1.7% below average for this time of year, and analysts
expect the market could flip to a surplus by next month. Hedge funds and other money managers remain bearish overall on
the contract, according to data from the U.S. Commodity Futures Trading Commission released Friday.
Cash prices for next-day delivery of physical gas reflected the reduced demand. Gas at the benchmark Henry hub in
Louisiana last traded at $2.82 a million Btus, below Friday's range of $2.86-$2.91. There were no bids or offers for
gas at the Transco Z6 hub in New York.
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(END) Dow Jones Newswires
May 26, 2015 09:14 ET (13:14 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052615 13:14 -- GMT
------
By Christian Berthelsen
Natural gas futures slipped Tuesday as forecasts for an East Coast heat wave faded, dashing expectations for a bout
of gas-fired cooling demand.
Natural gas for June delivery was down 7.6 cents, or 2.6%, at $2.8110 a million British thermal units, the lowest
level in two weeks on the New York Mercantile Exchange. The June contract expires Wednesday.
The loss extended last week's slide for the market, which is giving back gains made in early May as concerns mount
about robust production and more than adequate supplies.
The May rally was driven by hotter-than-average temperatures that were expected to provide a boost for natural gas
demand to generate power and run air conditioning. But the most recent forecasts show that trend is beginning to
moderate, with a spate of much-above normal temperatures in the Northeast fading in the coming days and predictions for
renewed heat into early June losing strength, according to forecaster Commodity Weather Group.
"Power demand that has fueled much of the strong price advance during the first (weeks) of this month appears to have
subsided," research consultancy Ritterbusch and Associates said in a note.
Soaring natural gas production has helped to almost fully restore supplies that were severely depleted by the harsh
cold of the 2013-2014 winter. Domestic inventories are now just 1.7% below average for this time of year, and analysts
expect the market could flip to a surplus by next month. Hedge funds and other money managers remain bearish overall on
the contract, according to data from the U.S. Commodity Futures Trading Commission released Friday.
Cash prices for next-day delivery of physical gas reflected the reduced demand. Gas at the benchmark Henry hub in
Louisiana last traded at $2.82 a million Btus, below Friday's range of $2.86-$2.91. There were no bids or offers for
gas at the Transco Z6 hub in New York.
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(END) Dow Jones Newswires
May 26, 2015 09:14 ET (13:14 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052615 13:14 -- GMT
------
Natural Gas Corner - Technical Update - Near Term Trend Is Now Bearish
After rallying up to a new 11-week high in last Tuesday's trade, the June 15 natural gas contract fell lower into Friday's close settling down on a weekly basis for the first time in 4 weeks.
Last Friday's daily settle at 2.887, down .129 or 4.3% for the week, was technically important as it came under 10 day moving average support. This was the first daily settle under this average since April 28th, one day after the market set the current 2015 low.
The near term trend is now bearish with 2.800-2.810 being the first area of support today for the June 15 contract followed by the 40 day moving average at 2.740. Longer term support is the 2.481 contract low posted in late-April.
The 10 day moving average broken as support on Friday now becomes the first area of resistance today at 2.935 followed by 3.020-3.040, and finally last week's 3.105 high.
The fund long position in the natural gas market has jumped by 96% over the past two weeks according to the Commitment of Trader's report released on Friday. The current long position as of last Tuesday's close was estimated at 96,565 contracts, up 32,564 from the previous week.
Technical Indicators: Moving Average Alignment - Neutral
Long Term RMI Trend Following Index - Bullish
Short Term RMI Trend Following Index - Bearish (turned lower on Friday)
Monday, May 25, 2015
Natural Gas Corner - Commitment of Trader's Report - Fund Long Position Jumps By 96% In Just Two Weeks
Speculative dollars continue to pour into the natural gas market as shown by Friday's Commitment of Trader's report.
The fund long futures position increased by 29,190 contracts to a net long position of 125,755 contracts according to the report.
Over the past two weeks, the fund long position has increased by 61,754 contracts or 96%.
They might soon regret buying into this market which last week closed down for the first time in 4 weeks.
The fund long futures position increased by 29,190 contracts to a net long position of 125,755 contracts according to the report.
Over the past two weeks, the fund long position has increased by 61,754 contracts or 96%.
They might soon regret buying into this market which last week closed down for the first time in 4 weeks.
Friday, May 22, 2015
Natural Gas Corner - Back Up And Running
With my new computer and transferred files, I can rest easier at night following a computer meltdown earlier this week.
I thought 15 years of work had been erased.
I thought 15 years of work had been erased.
Dow Jones Natural Gas - Morning Commentary
DJ Natural-Gas Prices Give Up Gains
By Nicole Friedman
NEW YORK--Natural-gas prices slipped Friday on continued concerns about ample supplies.
Prices have rallied in recent weeks since hitting a nearly three-year low in April, as cheap prices and hotter
temperatures spurred expectations of demand for gas-fueled power generation to run air-conditioning units. Natural-gas
stockpiles grew less than expected last week, an indication of stronger consumption.
However, robust production continues to keep the market subdued. In addition, some power generators switch from
natural gas to coal when gas prices near $3 a million British thermal units, damping demand.
Front-month futures for June delivery recently fell 3 cents, or 1%, to $2.919 a million British thermal units on the
New York Mercantile Exchange.
"The market now appears conflicted on whether continued strong cooling demand can sufficiently absorb the supply
excess," said Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas SA, in a note.
However, some analysts expect prices to resume rallying next week as temperatures are forecast to heat up.
"Forecasts for the upcoming two weeks strongly suggest that much warmer-than-normal weather will pervade most of the
East, especially the big energy consuming South and Middle Atlantic regions," said Richard Hastings, strategist at
Global Hunter Securities, in a note. "Prices could extend into the low $3.00s by late next week as evidence mounts that
demand is increasing."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.91/mmBtu, compared with Thursday's
average of $2.9311. Cash prices at the Transco Z6 hub in New York traded at $2.08/mmBtu, compared with Thursday's
average of $2.1313.
Write to Nicole Friedman at nicole.friedman@wsj.com
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(END) Dow Jones Newswires
May 22, 2015 10:15 ET (14:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052215 14:15 -- GMT
------
By Nicole Friedman
NEW YORK--Natural-gas prices slipped Friday on continued concerns about ample supplies.
Prices have rallied in recent weeks since hitting a nearly three-year low in April, as cheap prices and hotter
temperatures spurred expectations of demand for gas-fueled power generation to run air-conditioning units. Natural-gas
stockpiles grew less than expected last week, an indication of stronger consumption.
However, robust production continues to keep the market subdued. In addition, some power generators switch from
natural gas to coal when gas prices near $3 a million British thermal units, damping demand.
Front-month futures for June delivery recently fell 3 cents, or 1%, to $2.919 a million British thermal units on the
New York Mercantile Exchange.
"The market now appears conflicted on whether continued strong cooling demand can sufficiently absorb the supply
excess," said Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas SA, in a note.
However, some analysts expect prices to resume rallying next week as temperatures are forecast to heat up.
"Forecasts for the upcoming two weeks strongly suggest that much warmer-than-normal weather will pervade most of the
East, especially the big energy consuming South and Middle Atlantic regions," said Richard Hastings, strategist at
Global Hunter Securities, in a note. "Prices could extend into the low $3.00s by late next week as evidence mounts that
demand is increasing."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.91/mmBtu, compared with Thursday's
average of $2.9311. Cash prices at the Transco Z6 hub in New York traded at $2.08/mmBtu, compared with Thursday's
average of $2.1313.
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(END) Dow Jones Newswires
May 22, 2015 10:15 ET (14:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052215 14:15 -- GMT
------
Tuesday, May 19, 2015
Monday, May 18, 2015
Natural Gas Corner - Market Update - Bearish Fundamentals Remain In Place
The natural gas market has closed higher three consecutive weeks as the spot June 15 contract crossed the $3.000/MMBtu on Friday for the first time since late-February.
The market has been boosted by above-normal weather forecasts across much of the eastern U.S., increased power generation demand, a falling rig count and renewed fund buying.
Funds have been pouring money into the natural gas market over the past week after reaching a 3-year low in their speculative long position in the market the previous week. Friday's Commitment of Trader's report showed the fund long position increasing by 51% with a current long position as of last Tuesday's close estimated at 96,565 contracts, up 32,564 contracts from the previous week.
Power generation demand for natural gas remains strong with May demand averaging 22.5 Bcf per day, up 11% from 2014 according to Bloomberg. Power generation for natural gas is expected to be 32% of total demand this summer versus 33% for coal, the narrowest percentage differential between the two since 2012.
Friday's Baker-Hughes rig count showed an increase in the natural gas rig count by 2 to 223 but is down 103 from 2014. Even with the lower rig count, production has been affected very little due to the efficiencies of the producers which is some cases can be profitable down to $2.000/MMBtu.
Storage injections over the past 6 weeks have had little affect on the market price although storage injections have totaled 436 Bcf during this time period, 152 Bcf of 54% higher than the 5-year average. At some point this will matter but traders now appear focused on increased demand and an early start to summer in the eastern U.S.
Longer term summer forecasts remain neutral-bearish with the high usage Texas and Midwest areas predicted to have below-normal temperatures lowering demand of natural gas for cooling.
Production may fall later in the year but continues to increase according to the EIA which released the monthly estimates for February in the latest Short Term Energy Outlook. Production in February averaged 74.2 Bcf per day, up 10% from 2014.
The increase in end user demand, particularly by the utilities, is expected to lower the current oversupply of natural gas on the market which is estimated to be between 4-7 Bcf per day.
If production and storage injections remain high during this upcoming summer, end of October stockpiles could surpass the 4,000 Bcf mark which would be a new record.
The rally in the natural gas market may progress over upcoming weeks, but overall fundamentals remain negative which could lead to new price lows later this summer.
The market has been boosted by above-normal weather forecasts across much of the eastern U.S., increased power generation demand, a falling rig count and renewed fund buying.
Funds have been pouring money into the natural gas market over the past week after reaching a 3-year low in their speculative long position in the market the previous week. Friday's Commitment of Trader's report showed the fund long position increasing by 51% with a current long position as of last Tuesday's close estimated at 96,565 contracts, up 32,564 contracts from the previous week.
Power generation demand for natural gas remains strong with May demand averaging 22.5 Bcf per day, up 11% from 2014 according to Bloomberg. Power generation for natural gas is expected to be 32% of total demand this summer versus 33% for coal, the narrowest percentage differential between the two since 2012.
Friday's Baker-Hughes rig count showed an increase in the natural gas rig count by 2 to 223 but is down 103 from 2014. Even with the lower rig count, production has been affected very little due to the efficiencies of the producers which is some cases can be profitable down to $2.000/MMBtu.
Storage injections over the past 6 weeks have had little affect on the market price although storage injections have totaled 436 Bcf during this time period, 152 Bcf of 54% higher than the 5-year average. At some point this will matter but traders now appear focused on increased demand and an early start to summer in the eastern U.S.
Longer term summer forecasts remain neutral-bearish with the high usage Texas and Midwest areas predicted to have below-normal temperatures lowering demand of natural gas for cooling.
Production may fall later in the year but continues to increase according to the EIA which released the monthly estimates for February in the latest Short Term Energy Outlook. Production in February averaged 74.2 Bcf per day, up 10% from 2014.
The increase in end user demand, particularly by the utilities, is expected to lower the current oversupply of natural gas on the market which is estimated to be between 4-7 Bcf per day.
If production and storage injections remain high during this upcoming summer, end of October stockpiles could surpass the 4,000 Bcf mark which would be a new record.
The rally in the natural gas market may progress over upcoming weeks, but overall fundamentals remain negative which could lead to new price lows later this summer.
Dow Jones Natural Gas - End of Day Commentary
DJ Natural Gas Snaps Win Streak
By Timothy Puko
Natural gas ended a four-session winning streak as traders begin to heed warnings that the rally may have gone too
far.
Prices for the front-month June contract fell 0.6 cent, or 0.2%, to $3.01 a million British thermal units on the New
York Mercantile Exchange. Gas briefly surged to its highest intraday price since Jan. 22, spent most of the day in
losses.
Gas has had a bull run for three weeks but many analysts have warned that it could be maxed out. Many bulls are going
to be cashing out from their successful run, Dominick Chirichella, analyst at the Energy Management Institute, said in
a note. Supplies are also still high, and many traders will retreat because of exceptionally high surpluses likely to
come each week through the rest of the spring, said Bob Yawger, director of the futures division at Mizuho Securities
USA Inc.
"With that...hanging above our heads, it's going to be hard to rally any higher," Mr. Yawger said.
The rally has been broadly attributed to rising demand for gas to fuel electricity generation and by money managers
rushing away from what had been a one-sided bet that prices would fall. Hotter-than-normal May weather and the closings
of coal-fired power plants have increased demand for gas-fired power. That encouraged bearish traders to buy back
contracts they had sold, closing out bearish bets before they could go wrong.
Those factors still propped up the market Monday, Jim Ritterbusch, president of energy-advisory firm Ritterbusch &
Associates, said in a note. He expects that support to give out, but it may not happen immediately, he said.
"At some point, we feel that the increased demand for gas by the (power) sector will slow as" gas gets more expensive
compared to coal, Mr. Ritterbusch added. "But, such a development can be a slow mover."
FUTURES SETTLEMENT NET CHANGE
Nymex June $3.01 -0.6c
Nymex July $3.061 -0.9c
Nymex August $3.083 -0.7c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.7575-$2.78 $2.64-$2.68
El Paso SJ $2.76-$2.78 $2.64-$2.68
Henry Hub $2.98-$3.045 $2.94-$2.975
Katy $2.92-$3.00 $2.87-$2.9225
SoCal $2.91-$2.93 $2.80-$2.82
Tex East M3 $1.68-$1.75 $1.40-$1.55
Transco 65 $2.99-$3.05 $2.93-$2.975
Transco Z6 $3.00-$3.14 $2.49-$2.80
Waha $2.84-$2.90 $2.78-$2.81
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
May 18, 2015 14:58 ET (18:58 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
051815 18:58 -- GMT
------
By Timothy Puko
Natural gas ended a four-session winning streak as traders begin to heed warnings that the rally may have gone too
far.
Prices for the front-month June contract fell 0.6 cent, or 0.2%, to $3.01 a million British thermal units on the New
York Mercantile Exchange. Gas briefly surged to its highest intraday price since Jan. 22, spent most of the day in
losses.
Gas has had a bull run for three weeks but many analysts have warned that it could be maxed out. Many bulls are going
to be cashing out from their successful run, Dominick Chirichella, analyst at the Energy Management Institute, said in
a note. Supplies are also still high, and many traders will retreat because of exceptionally high surpluses likely to
come each week through the rest of the spring, said Bob Yawger, director of the futures division at Mizuho Securities
USA Inc.
"With that...hanging above our heads, it's going to be hard to rally any higher," Mr. Yawger said.
The rally has been broadly attributed to rising demand for gas to fuel electricity generation and by money managers
rushing away from what had been a one-sided bet that prices would fall. Hotter-than-normal May weather and the closings
of coal-fired power plants have increased demand for gas-fired power. That encouraged bearish traders to buy back
contracts they had sold, closing out bearish bets before they could go wrong.
Those factors still propped up the market Monday, Jim Ritterbusch, president of energy-advisory firm Ritterbusch &
Associates, said in a note. He expects that support to give out, but it may not happen immediately, he said.
"At some point, we feel that the increased demand for gas by the (power) sector will slow as" gas gets more expensive
compared to coal, Mr. Ritterbusch added. "But, such a development can be a slow mover."
FUTURES SETTLEMENT NET CHANGE
Nymex June $3.01 -0.6c
Nymex July $3.061 -0.9c
Nymex August $3.083 -0.7c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.7575-$2.78 $2.64-$2.68
El Paso SJ $2.76-$2.78 $2.64-$2.68
Henry Hub $2.98-$3.045 $2.94-$2.975
Katy $2.92-$3.00 $2.87-$2.9225
SoCal $2.91-$2.93 $2.80-$2.82
Tex East M3 $1.68-$1.75 $1.40-$1.55
Transco 65 $2.99-$3.05 $2.93-$2.975
Transco Z6 $3.00-$3.14 $2.49-$2.80
Waha $2.84-$2.90 $2.78-$2.81
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
May 18, 2015 14:58 ET (18:58 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
051815 18:58 -- GMT
------
Natural Gas Corner - Seasonal Price Trend Update For Natural Gas During 2015
The seasonal chart for natural gas shows the price trend over the past 3 (blue line) and 5 years (black line) in comparison to the current year shown in green.
The first of two expected seasonal lows has likely formed in the market the last week of April, slightly later than in past years.
A secondary seasonal low is expected post-summer typically forming during the months of August or September.
On both a 3 and 5 year time frame, the secondary seasonal low tends to be the lowest price point of the year for natural gas.
Dow Jones Natural Gas - Morning Commentary
DJ Natural Gas Boosted by Rising Demand for Gas-Fired Power
By Timothy Puko
Natural gas is rallying for a fifth straight session as power demand and traders who move on charts are still pushing
up the market, analysts said.
Prices for the front-month June contract rose 0.5 cent, or 0.2%, to $3.021 a million British thermal units on the New
York Mercantile Exchange. Gas had seen losses for most of the morning but flipped to gains after floor trading opened,
rising to a new high for intraday trading dating back to Jan. 22.
Gas's bull run for three weeks has been broadly attributed to rising demand for gas to fuel electricity generation
and by money managers rushing away from what had been a one-sided bet that prices would fall. Hot weather and the
closings of coal-fired power plants have increased demand for gas-fired power. That encouraged bearish traders to buy
back contracts they had sold to close out bearish bets before they could go wrong, feeding a rally.
Those factors are still at play Monday, Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates,
said in a note.
"At some point, we feel that the increased demand for gas by the (power) sector will slow as" gas gets more expensive
compared to coal, he said. "But, such a development can be a slow mover."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.045/mmBtu, compared with Friday's
range of $2.94-$2.975. Cash prices at the Transco Z6 hub in New York last traded at $3.125/mmBtu, compared with
Friday's range of $2.49 to $2.80.
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
May 18, 2015 09:53 ET (13:53 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
051815 13:53 -- GMT
------
By Timothy Puko
Natural gas is rallying for a fifth straight session as power demand and traders who move on charts are still pushing
up the market, analysts said.
Prices for the front-month June contract rose 0.5 cent, or 0.2%, to $3.021 a million British thermal units on the New
York Mercantile Exchange. Gas had seen losses for most of the morning but flipped to gains after floor trading opened,
rising to a new high for intraday trading dating back to Jan. 22.
Gas's bull run for three weeks has been broadly attributed to rising demand for gas to fuel electricity generation
and by money managers rushing away from what had been a one-sided bet that prices would fall. Hot weather and the
closings of coal-fired power plants have increased demand for gas-fired power. That encouraged bearish traders to buy
back contracts they had sold to close out bearish bets before they could go wrong, feeding a rally.
Those factors are still at play Monday, Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates,
said in a note.
"At some point, we feel that the increased demand for gas by the (power) sector will slow as" gas gets more expensive
compared to coal, he said. "But, such a development can be a slow mover."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.045/mmBtu, compared with Friday's
range of $2.94-$2.975. Cash prices at the Transco Z6 hub in New York last traded at $3.125/mmBtu, compared with
Friday's range of $2.49 to $2.80.
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
May 18, 2015 09:53 ET (13:53 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
051815 13:53 -- GMT
------
Natural Gas Corner - Technical Update - Market Closes Higher Three Weeks In A Row Gaining 22%
The natural gas market has now closed higher three weeks in a row with the June 15 contract on Friday trading above the 3.000 level for the first time since late-February.
Recent strength in the market follows a price break which dropped the spot contract to a 31-month low at 2.443 in late-April. The rally over the following three weeks has lifted the June 15 contract higher by 22% up to last Friday's 3.016 closing price.
The trend for the market remains up with last week's 3.036 high being the first area of resistance followed by 3.090-3.100.
Former resistance between 2.970-2.980 broken late last week now becomes the first area of support today with longer term support at the 10 day moving average currently at 2.885. It was from 10 day moving average support that last week's rally began.
The seasonal rally for the natural gas market is currently in progress. Hedge funds which had almost completely exited the market two weeks ago have been back buying futures. Friday's Commitment of Trader's report showed the fund long position in the market increasing by 51% from 64,001 contracts to 96,565, up 32,564 from the previous week.
Technical Indicators: Moving Average Alignment - Neutral-Bullish
Long Term Trend Following Index - Bullish
Short Term Trend Following Index - Bullish
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