What is Up with Natural Gas?

HenryTo · Posted: Tue Dec 26, 2006 11:00 am Post subject: What is Up with Natural Gas?

Since our December 17th commentary was published ("What is Up with Natural Gas?"), natural gas prices (basis the January 2007 contract) are already down by more than $1/MMBtu.

The contract is way oversold but a solid bottom is still nowhere in sight. For now, I prefer to sit and wait on the sidelines before buying anything natural-gas related (regulated pipelines notwithstanding). Watch out for Canadian producers especially since I believe the Canadian dollar is still way overvalued.

Best,

Henry

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HenryTo · Posted: Fri Dec 30, 2011 7:17 pm Post subject:

It's here--February 2012 gas under $3/MMBtu!

UNG makes a new all-time low.

http://finance.yahoo.com/q/bc?s=UNG+Basic+Chart&t=2y

HenryTo · Posted: Thu Dec 22, 2011 3:03 pm Post subject:

The "scary" thing is that the Marcellus Shale is just ramping up its production.

http://www.bloomberg.com/news/2011-12-21/shale-boom-heralds-fifth-year-of-gas-declines-energy-markets.html

HenryTo · Posted: Wed Dec 14, 2011 1:39 pm Post subject:

Plunge in commodities takes natural gas along with it. HH gas at $3.14 in mid-December. Simply amazing. UNG makes another all-time low.

HenryTo · Posted: Tue Dec 13, 2011 1:49 pm Post subject:

Agreed. Not immediately but definitely in the next several years. Robotics, 3-D manufacturing/printing, more compact supercomputers, and faster communications will lead the way. Won't create that many unskilled jobs, however.

rffrydr · Posted: Mon Dec 12, 2011 9:08 pm Post subject:

...Seeds are in place (along with plenty of green shoots) for that "manufacturing renaissance" many hope for--driven by FDI (including chinese!).
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Mon Dec 12, 2011 7:36 pm Post subject:

Who would've thought? Natural gas at $3.25/MMBtu in the middle of December. UNG declines to an all-time low.
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--Futures at lowest in two years as hopes fade for demand pick-up

--"Continuation gap" a bearish technical sign

--Mild weather seen through December

NEW YORK (Dow Jones)--Natural gas futures plunged to their lowest finish in more than two years Monday, as persistent forecasts for a mild December squelched expectations for a meaningful increase in gas-fired heating demand anytime soon.

Natural gas for January delivery settled down 6.3 cents, or 1.9%, to $3.254 a million British thermal units on the New York Mercantile Exchange. That's the lowest settlement price since Sept. 11, 2009.

Futures took a nosedive as weather forecasters projected above-normal temperatures through December, meaning that home and office heating fueled by natural gas is likely to remain depressed for the foreseeable future.

"This time of year you usually see your first major cold fronts hitting the Northeast and your major (natural gas) consumer zones," said Kent Bayazitoglu, analyst at Gelber & Associates in Houston. "We're not seeing that right now, and that has the market real concerned."

In a sign of the market's downward momentum, futures opened more than 6 cents below their closing price on Friday. Such a move created a so-called continuation gap that technical traders view as a highly bearish signal, analysts said.

"I wouldn't be buying this, based on the gap alone," said Stephen Schork, president of the Schork Group, a trading advisory.

Weather forecasters continue to call for mild temperatures over the next several weeks. Private forecaster MDA EarthSat said it sees above-normal temperatures across the Northeast and much of the Midwest through the end of the month. Parts of the Western U.S. could get cooler temperatures, the forecaster said, however the Northeast and Midwest are the key consumers of natural gas during the winter months.

"Temperatures on an absolute basis are dropping, and that's very normal--but the temperatures being forecast are well above normal," said Kyle Cooper, managing partner at IAF Advisors in Houston.

The recent steep decline in gas futures has been spurred by mild weather across the U.S. coupled with continued high rates of gas production. Typically, prices climb this time in December, as temperatures fall and gas-fired heating needs pick up, but prices have been in free-fall in December and show little sign of slowing.

This month alone, front-month gas futures have fallen almost 30 cents.

U.S. gas inventories have only just begun to decline. Last week, the Department of Energy reported a drop of 20 billion cubic feet in gas inventories, well below the 66-bcf draw normally expected for that time of year.

Traders will get another inventory update this Thursday, though several market participants say they expect yet another tepid draw.

rffrydr · Posted: Sun Dec 04, 2011 8:25 am Post subject:

A blooming "politics" (just look at that tie):

http://dealbook.nytimes.com/2011/12/03/modest-bonus-year-on-wall-st-but-stock-could-yield-fortunes/?hp
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Sat Nov 26, 2011 1:46 am Post subject:

Still more natural gas coming into the system, if only our (more precisely North Dakota's) infrastructure was sufficient to bring the gas to market:

http://www.eia.gov/todayinenergy/detail.cfm?id=4030

rffrydr · Posted: Wed Nov 16, 2011 3:45 pm Post subject:

Bump.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Mon Nov 14, 2011 11:23 am Post subject:

Natural gas declines for four consecutive trading days. Storage expected to hit all-time highs this week. UNG declines to an all-time low.

http://online.wsj.com/article/BT-CO-20111114-710245.html

rffrydr · Posted: Fri Nov 04, 2011 6:45 am Post subject:

Makes cover of Bizweek, "savior of the economy."

http://www.businessweek.com/magazine/could-shale-gas-reignite-the-us-economy-11032011.html?chan=magazine+channel_top+stories
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Sun Oct 30, 2011 7:24 pm Post subject:

"Fracking".....the whole systematic imaging and manipulation of the ground underneath, just might have been "The Next Big Thing."

http://www.businessweek.com/magazine/new-life-for-power-plants-losing-steam-10132011.html

http://www.businessweek.com/magazine/oilrich-but-gaspoor-in-the-middle-east-10132011.html
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Thu Oct 27, 2011 9:26 am Post subject:

Steel will be the swing factor near term for this: watch X, NUE.

Longer term don't forget that what's $3.50 here is $15 in Japan. Structural moves, Tanker glut and MA suggest we may just have something to export again after all.
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Mon Oct 17, 2011 8:44 am Post subject:

I see this first a signal that high-yield is still in the game--from a bank no less. That it is Barclay's should probably temper the enthusiasm.

HenryTo · Posted: Wed Sep 28, 2011 12:21 pm Post subject:

Environmental groups already protesting against the exploitation of its shale gas resources but 200 Tcf is no laughing matter:

http://www.bbc.co.uk/news/science-environment-15021328