Up one day on hotter weather forecasts, down the next on expectations for another strong storage build. The natural gas market is flat lining in an incredibly boring sideways trend.
There is really nothing new to add which hasn't already been written.
Storage is on pace to end 2015 at a new record high surpassing the 2012 peak high of 3,929 Bcf (billion cubic feet). Storage injections during 2015 have surpassed the five-year average 14 out of 16 weeks.
Weather forecasts are near term supportive but longer term bearish particularly for the month of August.
Production over the past 8 weeks has now fallen 5 out of the 8 weeks according to Bentek and the EIA. The decline in production is minimal (less than 1 Bcf) but could be the start of a sustained drop in production. The natural gas rig count last week also fell to a new all-time low of 216. At some point, U.S. production will be affected. The point could be sooner rather than later.
For now, market focus remains on increasing storage which could drop the spot market price back toward the lower-$2.000/MMBtu level over the next few months.
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