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Market Intel Archives

Natural Gas rallies to 2013 high after EIA reports record storage draw

December 20, 2013

On Thursday, January Natural Gas opened up around $0.09 ahead of the weekly natural gas storage report, where a huge withdrawal was expected. Most of the morning was spent in a tight range between $4.33 and $4.35. Just before the report hit the wires, January dove to a low of $4.288. If somebody was trying to out-guess the report, they couldn’t have been more wrong. EIA reported a withdrawal far above the market consensus – see below – shattering the all-time record. January instantly popped back up to the high $4.30’s and then started to move gradually higher. The year-to-date high of $4.44 has been a sticky technical level for this market and Natural Gas spent nearly an hour teetering on either side of it before retreating back to $4.41. But a steady rally during the last hour of the day took January to the highest settle of the past 12 months. This morning in Globex, January Natural Gas is up around a penny, WTI Crude is down around a quarter and Heating Oil and Gasoline are up around a cent and a half.

Yesterday morning the EIA reported the largest weekly natural gas storage withdrawal since the Department of Energy started keeping track in 1994: 285 BCF. Cold weather across nearly the entire country, strong demand from the industrial and power generation sectors, displacement of heating oil by natural gas in the Northeast and the expansion of salt cavern storage that can be rapidly filled and emptied all played a role in setting the new record. The five year average inventory deficit more than doubled in a week, from 110 BCF to 261 BCF while the year-over-year deficit jumped from 273 BCF to 488 BCF.

Contrary to nearly everything else in the natural gas marketplace, Northeast cash prices continued to sink on Thursday. Today was forecast to be the warmest day of the week in addition to being Friday. New England city gates averaged near $8.00 while New York posted just over $4.00.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas Glossary

EIA reports all-time record natural gas storage withdrawal

December 19, 2013

EIA reported a massive 285 BCF withdrawal from storage for the week ending Dec. 13, smashing the former all-time record of 274 BCF. In response, the January futures popped up from pre-release trade in the low $4.30’s to a high just shy of $4.40.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas futures move slightly lower ahead of monster storage report

December 19, 2013

On Wednesday, January Natural Gas opened up around a penny. The market was relatively quiet, with no new fundamental news hitting the wires ahead of this morning’s storage report. January traded up to an intraday high of $4.325 during the first half hour of the day and then retreated back below the $4.30 level. Most of the day was spent in a range between $4.26 and $4.30. A late sell-off took January all the way down to a low of $4.244. This morning in Globex, January Natural Gas is up around $0.065, WTI Crude is almost unchanged and Heating Oil and Gasoline are up around half a cent.

Analysts are expecting a net withdrawal of around 260 BCF in this morning’s natural gas storage report. The various analyst surveys were surprisingly close, considering the sheer magnitude of the number. Still, an estimate this size comes with a lot of uncertainty because it’s so close to the observed peak withdrawal capabilities of the U.S. pipeline grid. A 260 BCF withdrawal would tie the third-largest withdrawal reported by EIA since 1994. The market consensus is nearly double the five year average of 134 BCF.

Northeast cash prices continued to fall on Wednesday as warmer temperatures across the region helped to relieve the strain on the pipeline grid. New England markets averaged near $11.25 on the day while New York posted just below $4.40.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas Glossary

Natural Gas ends higher after probing new lows

December 18, 2013

On Tuesday, January Natural Gas opened down around $0.075 as the near-term weather forecasts continue to moderate. After a brief recovery up to $4.25, the selling resumed and January traded all the way down to an intraday low of $4.194. From there, prices gradually recovered for the rest of the day. Natural Gas broke into positive territory shortly after lunchtime and kept climbing. January hit an intraday high of $4.326 just before 2:00 PM and closed in positive territory in spite of a late sell-off. The past two trading sessions have started to remedy the overbought condition on the technical chart, but we’ll need to see further consolidation before the Stochastic Oscillator returns to neutral territory. The nearest support is coming from the 20-Day Moving Average, currently at $4.269. This morning in Globex, January Natural Gas is up around a penny, WTI Crude is up around $0.20 and Heating Oil and Gasoline are up around a cent and a half.

Cash prices continued to pull back on Tuesday. New England averaged just above $20 on the day while New York posted around $5.00.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas Glossary

Natural Gas futures retreat on warming weather forecasts

December 17, 2013

On Monday, January Natural Gas opened down around $0.11 after weather forecasts moderated over the weekend. The intraday low of $4.232 was made during the opening range and prices generally rebounded throughout the morning hours. January hit an intraday high of $4.318 just after 11:00 AM and then pulled back into the mid-$4.20’s. A late rally took prices back to the brink of $4.30 but the buyers couldn’t quite get over the hump. This week’s frigid cold succeeded in driving prices back near the highest levels seen in 2013. To get to the next level, however, it appears that we’re going to need to see sustained cold weather, not just week-long arctic blasts followed by spells of above-normal temperatures. Market analysts at Bentek are suggesting that upcoming storage reports could break the all-time withdrawal record of 274 BCF, set back in January of 2008. This morning in Globex, January Natural Gas is down around $0.045, WTI Crude is down around $0.30 and Heating Oil and Gasoline are down around a penny.

Cash prices retreated on Monday in spite of the brutal cold gripping much of New England this morning. New England market averaged near $22.50 on the day while New York retreated to around $6.90.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas Glossary

Natural Gas tops out near year-to-date high

December 16, 2013

On Friday, January Natural Gas opened down around $0.02. After breaking through the $4.308 resistance earlier in the week, the bulls were regrouping for a big push to the year-to-date high of $4.444, set back in early May. Natural Gas dipped after the opening bell, reaching an early low of $4.354. The big push started at around 10:00 AM, with prices quickly trading back up through the $4.40 level. January peaked at around 11:00 AM, hitting $4.443, one tick shy of the year-to-date high. From there, priced dropped sharply back to the upper $4.30’s. The bulls were never able to regain momentum and January traded all the way down to an intraday low of $4.347 en route to a close in the red. The weather forecasts warmed up somewhat over the weekend and the impact is obvious in pre-market trading. This morning in Globex, January Natural Gas is down around $0.14, WTI Crude is up around $0.70, Heating Oil is up around $0.06 and Gasoline is up around $0.045.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

New England cash prices reached their highest levels since January of 2013 on Friday. Anticipating a very cold Monday, New England city gates averaged around $32.50 on the day. New York posted near $7.20.

Natural Gas Glossary

Natural Gas futures approach year-to-date high

December 12, 2013

On Wednesday, January Natural Gas opened down around half a cent. The morning was relatively quiet, with Natural Gas drifting gradually lower. January touched an intraday low of $4.213 several times before prices started to rally around 11:00 AM. The rest of the day saw Natural Gas continue its recent rally. January broke through the $4.308 technical resistance for the first time at around 12:30 PM. After a brief round of consolidation, January moved to its highest levels of the day, hitting an intraday high of $4.34 just before the closing bell. The next technical objective for this rally is likely to be the year-to-date high made back in early May, $4.444. The momentum of the market clearly favors further gains although we’re very overbought from a technical perspective. This morning in Globex, January Natural Gas is up around $0.09, WTI Crude is up around $0.35, Heating Oil is almost unchanged and Gasoline is up fractionally.

Analysts are expecting a net withdrawal of around 85 BCF in this morning’s natural gas storage report. The market consensus is a bit lower than the early estimates we were seeing a couple of days ago, but still well above last year’s 9 BCF draw and the five year average of 76 BCF.

Northeast cash markets remained very strong on Wednesday, with Mid-Atlantic markets moving sharply higher, reducing the spread to New England. New England city gates averaged near $22 on the day while New York posted near $16.75.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to 
natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas Glossary

Natural Gas regroups after profit-taking

December 11, 2013

On Tuesday, January Natural Gas opened up around $0.045 as Monday’s gains continued overnight. The bullish sentiment quickly gave way to a round of profit-taking after the opening bell, however. January hit an intraday high of $4.282 during the first minutes of the trading day and then started to move gradually lower. By 10:30 AM the market was trading below $4.26 and a second wave of selling over the lunch hour too January to an intraday low of $4.199. The market found support near $4.20 and started to rebound, moving back up to the $4.24 level. From a technical standpoint, the bulls are continuing to target the $4.308 high made back in late May. This morning in Globex, January Natural Gas is up around $0.04, WTI Crude is down around $0.15, Heating Oil is down around half a cent and Gasoline is down around $0.025.

Northeast cash markets shot up on Tuesday as the market prepared for much colder than normal temperatures across the region and indeed much of the Lower 48. New England city gates averaged around $21 while New York rallied up to around $8.10. Even long-suffering DTI South Point cash prices showed a bit of resilience, coming in around $3.90.

For access to Sprague's full natural gas market watch report including commentary not posted here, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas Glossary

Natural Gas rallies again on colder weather forecasts

December 10, 2013

On Monday, January Natural Gas opened up around $0.08 as the market’s relentless focus on short-term weather forecasts continued to fuel the rally. After a quick run up to the low $4.20’s, Natural Gas eased back, hitting an intraday low of $4.176 around 10:30 AM. After several attempts to move lower, buying kicked in and Natural Gas moved to new highs. January topped out at $4.248 at around 12:30 PM and Natural Gas spent the rest of the day in the low-to-mid $4.20’s. The weather forecasts look bullish for at least the next week, with coast-to-coast cold expected to drive high levels of demand. The early estimates for Thursday morning’s storage report are shaping up near a 95 BCF draw, which is supportive compared to all historical comparisons. Traders are looking to the $4.308 high made back in May as a possible near-term technical resistance level. This morning in Globex, January Natural Gas is up around $0.045, WTI Crude is up around $1.20, Heating Oil is up around $0.025 and Gasoline is up around $0.02.

New England cash prices exploded out of the gate in the week’s first trading session. Algonquin posted over $17 while Tennessee Zone 6 came in over $14.50. New York markets showed a bit of tightness for the first time in a while, posting near $5.05 while the rest of the Mid-Atlantic markets remained below the $5 mark.

Natural Gas Glossary

Natural gas opened around $0.03 Friday; like to follow the weather forecast updates closely

December 09, 2013
On Friday, January Natural Gas opened up around $0.03.

For access to the full natural gas market watch report and not just the first line, please send your request to natgas@spragueenergy.com, or call 1-855-466-2842.

Natural Gas Glossary