Natural gas prices traded lower for the entire session on Monday but the spot October 15 contract again failed to break under 2.630-2.640 weekly low support.
At some point, support will be broken with expectations for at least a retest of the current 2015 spot contract low of 2.443 set in early-May.
Weather forecasts continue to lend support with above-normal temperatures expected across much of the eastern U.S. However, this means less as the market moves into September when average temperatures across the U.S. fall by 7 degrees from August.
10 weeks are left in the 2015 injection season which ends the last week of October. Rapidly filling storage has kept prices in a sideways trend over the past summer although summer cooling demand for natural gas has been robust.
The increase in demand has not been enough to overwhelm production which is currently averaging 72-72.5 Bcf per day (dry gas production). Production has been moderating holding under the 74+Bcf high reached in late-2014. But it has yet to decline which is what is needed to put a bottom under the market.
The seasonal price trend for the market suggests a post-summer low should be forming now but this low could be delayed until summer cooling demand finally ends.
Not much more to comment on the market as news is limited and price movement is reflective of this fact. Volatility should increase once weekly low support is broken.
natural gas
Monday, August 31, 2015
Dow Jones Natural Gas - End of Day Commentary
DJ Natural Gas Prices Decline on Expected Demand Drop
By Nicole Friedman
NEW YORK--Natural gas prices slid Monday, notching a second straight monthly loss, as traders looked past the current
hot weather to an expected drop in demand in the fall.
Futures for October delivery settled down 2.6 cents, or 1%, at $2.689 a million British thermal units on the New York
Mercantile Exchange. Prices fell 1% this month.
Hot weather typically boosts natural-gas demand, as households and offices use gas-powered electricity to run
air-conditioning units. Weather-driven demand has helped keep the natural-gas market relatively balanced.
Higher-than-average temperatures are forecast in the eastern U.S. in the next six to 10 days, but more moderate
weather is expected in the next 11 to 15 days, according to forecaster WSI Corp.
"While periods of warmer-than-normal weather are still possible, after this week, weather conditions will generally
be too moderate to create high levels of air-conditioning demand," said Andy Weissman, chief executive of EBW
AnalyticsGroup, in a note.
Prices have traded in a tight range all summer, as strong demand has kept prices supported despite robust production.
However, with temperatures expected to cool as summer ends, "the price stalemate may come under pressure, with more
downside risk in the near-term," said consulting firm RBN Energy in a blog post Sunday. "It will probably take an
unusual weather event to boost natural gas prices during the fall season," such as a hurricane or an unexpected heat
wave.
Bank of America Merrill Lynch lowered its natural-gas price forecast last week to $3.50/mmBtu in 2016, from its prior
forecast of $3.90/mmBtu.
Raymond James cut its natural-gas price forecasts Monday to $3.25 a thousand cubic feet from 2016 to 2020, down from
its prior forecasts of $3.55/mcf in 2016 and $3.75/mcf from 2017 to 2020.
FUTURES SETTLEMENT NET CHANGE
Nymex October $2.689 -2.6c
Nymex November $2.761 -3.1c
Nymex December $2.905 -3.4c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.56-$2.60 $2.47-$2.54
El Paso SJ $2.54-$2.585 $2.46-$2.56
Henry Hub $2.66-$2.70 $2.645-$2.67
Katy $2.60-$2.65 $2.59-$2.66
SoCal $2.65-$2.72 $2.67-$2.77
Tex East M3 $1.19-$1.33 $0.985-$1.14
Transco 65 $2.64-$2.68 $2.62-$2.675
Transco Z6 $2.76-$2.87 $1.80-$2.10
Waha $2.60-$2.62 $2.56-$2.60
Write to Nicole Friedman at nicole.friedman@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
August 31, 2015 15:21 ET (19:21 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
083115 19:21 -- GMT
------
By Nicole Friedman
NEW YORK--Natural gas prices slid Monday, notching a second straight monthly loss, as traders looked past the current
hot weather to an expected drop in demand in the fall.
Futures for October delivery settled down 2.6 cents, or 1%, at $2.689 a million British thermal units on the New York
Mercantile Exchange. Prices fell 1% this month.
Hot weather typically boosts natural-gas demand, as households and offices use gas-powered electricity to run
air-conditioning units. Weather-driven demand has helped keep the natural-gas market relatively balanced.
Higher-than-average temperatures are forecast in the eastern U.S. in the next six to 10 days, but more moderate
weather is expected in the next 11 to 15 days, according to forecaster WSI Corp.
"While periods of warmer-than-normal weather are still possible, after this week, weather conditions will generally
be too moderate to create high levels of air-conditioning demand," said Andy Weissman, chief executive of EBW
AnalyticsGroup, in a note.
Prices have traded in a tight range all summer, as strong demand has kept prices supported despite robust production.
However, with temperatures expected to cool as summer ends, "the price stalemate may come under pressure, with more
downside risk in the near-term," said consulting firm RBN Energy in a blog post Sunday. "It will probably take an
unusual weather event to boost natural gas prices during the fall season," such as a hurricane or an unexpected heat
wave.
Bank of America Merrill Lynch lowered its natural-gas price forecast last week to $3.50/mmBtu in 2016, from its prior
forecast of $3.90/mmBtu.
Raymond James cut its natural-gas price forecasts Monday to $3.25 a thousand cubic feet from 2016 to 2020, down from
its prior forecasts of $3.55/mcf in 2016 and $3.75/mcf from 2017 to 2020.
FUTURES SETTLEMENT NET CHANGE
Nymex October $2.689 -2.6c
Nymex November $2.761 -3.1c
Nymex December $2.905 -3.4c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.56-$2.60 $2.47-$2.54
El Paso SJ $2.54-$2.585 $2.46-$2.56
Henry Hub $2.66-$2.70 $2.645-$2.67
Katy $2.60-$2.65 $2.59-$2.66
SoCal $2.65-$2.72 $2.67-$2.77
Tex East M3 $1.19-$1.33 $0.985-$1.14
Transco 65 $2.64-$2.68 $2.62-$2.675
Transco Z6 $2.76-$2.87 $1.80-$2.10
Waha $2.60-$2.62 $2.56-$2.60
Write to Nicole Friedman at nicole.friedman@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
August 31, 2015 15:21 ET (19:21 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
083115 19:21 -- GMT
------
Bearish Triangle Pattern On The Natural Gas Weekly Chart Remains In Play
The triangle pattern initiated on the weekly natural gas
chart two weeks ago remains intact even with last week’s higher close.
The triangle was triggered in mid-August with the downside
breakout under lower trend line support between 2.740-2.750.
The initial downside objective is the point 1 low of 2.443
set in early-May. If this low is broken as support, a further sell off is
expected with following support at 2.230-2.250.
A rally back above upper triangle trend line
resistance currently near 2.900 will negate the triangle turning the near term
trend back up.
Key Technical Test For The Crude Oil Market This Week
The spot October 15 crude oil contract late last week
rallied higher from a new 6-year low of 37.75 set on Wednesday.
The rally lifted the market back toward 16-year trend line
support broken two weeks ago. This former support now becomes resistance
at the lower-45.00 level topping out on Friday at a 45.90 high.
If the crude oil market fails to rally back above former trend line support, the trend will remain down with last week’s 37.75 low being the first area of support. Longer term support is the 32.40 low set in December 2008.
If the October contract can rally back over former trend
line support and remain above the 45.00 level, it may indicate a long term low
has been set in the crude oil market.
Dow Jones - Natural Gas Prices Decline On Expected Demand Drop
DJ Natural Gas Prices Decline on Expected Demand Drop
By Nicole Friedman
NEW YORK--Natural gas prices slid Monday as traders looked past current hot weather to an expected drop in demand in
the fall.
Futures for October delivery recently fell 5.8 cents, or 2.1%, to $2.657 a million British thermal units on the New
York Mercantile Exchange.
Hot weather typically boosts natural gas demand, as households and offices use gas-powered electricity to run
air-conditioning units. Weather-driven demand has helped keep the natural-gas market relatively balanced.
Higher-than-average temperatures are forecast in the eastern U.S. in the next six to 10 days, but more moderate
weather is expected in the next 11 to 15 days, according to forecaster WSI Corp.
"While periods of warmer-than-normal weather are still possible, after this week, weather conditions will generally
be too moderate to create high levels of air conditioning demand," said Andy Weissman, chief executive of EBW
AnalyticsGroup, in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.675/mmBtu, compared with Friday's
range of $2.645-$2.67. Cash prices at the Transco Z6 hub in New York last traded at $2.7675/mmBtu, compared with
Friday's range of $1.80-$2.10.
Write to Nicole Friedman at nicole.friedman@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
August 31, 2015 10:11 ET (14:11 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
083115 14:11 -- GMT
------
By Nicole Friedman
NEW YORK--Natural gas prices slid Monday as traders looked past current hot weather to an expected drop in demand in
the fall.
Futures for October delivery recently fell 5.8 cents, or 2.1%, to $2.657 a million British thermal units on the New
York Mercantile Exchange.
Hot weather typically boosts natural gas demand, as households and offices use gas-powered electricity to run
air-conditioning units. Weather-driven demand has helped keep the natural-gas market relatively balanced.
Higher-than-average temperatures are forecast in the eastern U.S. in the next six to 10 days, but more moderate
weather is expected in the next 11 to 15 days, according to forecaster WSI Corp.
"While periods of warmer-than-normal weather are still possible, after this week, weather conditions will generally
be too moderate to create high levels of air conditioning demand," said Andy Weissman, chief executive of EBW
AnalyticsGroup, in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.675/mmBtu, compared with Friday's
range of $2.645-$2.67. Cash prices at the Transco Z6 hub in New York last traded at $2.7675/mmBtu, compared with
Friday's range of $1.80-$2.10.
Write to Nicole Friedman at nicole.friedman@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
August 31, 2015 10:11 ET (14:11 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
083115 14:11 -- GMT
------
Natural Gas Corner - Technical Update - Weekly Low Support Being Tested In Today's Early Trade
Natural gas prices trended sideways during last week’s trade
as the spot October 15 contract held in another narrow .084 weekly range.
The October contract topped out at a 2.725 weekly high and
bottomed out at a 2.641 low holding above key weekly low support between
2.638-2.640 set earlier this year. For the week, the contract ended
Friday’s session at 2.715, up .018 for the 5 days of trade.
The primary trend remains sideways to down with a
breakout under weekly low support needed to drop the market back toward
new lows for 2015.
A drop under 2.638-2.640 support would turn 2.440-2.450 and
2.230-2.250 into the next longer term support levels for the October contract.
The 10 day moving average which held as resistance during
all of last week’s trade is the first area of resistance today at 2.705
with longer term resistance at the 2.800 and 2.940-2.980.
Technical Indicators: Moving Average Alignment –
Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
Subscribe to:
Posts (Atom)