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Market Intel Archives

Natural Gas rose on renewed weather support

February 19, 2014

On Tuesday, the March NYMEX futures contract opened at $5.466.  This was more than 25 cents higher than Friday’s closing price as the weather forecasts over the three-day weekend predicted cold weather persisting through the beginning of March.  This price led to early profit-taking and prices immediately sank.  March was at $5.411 a little after 9:30AM (the intraday low). Renewed buying pressure drove prices up past the opening range before topping out around $5.52 at 11AM.  The 11 o’clock hour saw another round of selling and by noon, Natural Gas had declined to the $5.44 level.  Updated weather forecasts were published at noon and when they showed no change from the earlier forecasts, prices rose for the rest of the trading day.  After plateauing at $5.51 from 1:30PM to 2PM, prices rose steadily and by 10 minutes before the close, they hit $5.586 – the intraday high. Tuesday closed at $5.551. In Globex, WTI Crude is up 60 cents, Natural Gas is up 37 cents, and Heating Oil & Gasoline are both flat.

New England cash prices have come down and average just over $13.  The New York cash price has come down also and is a little more than $6.

Natural Gas Glossary

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 price fell slightly on Friday

February 18, 2014

Friday was a choppy day for the front-month NYMEX futures contract as prices crossed the $5.22 level six times.  After opening at $5.296 (seven cents higher than Thursday’s close), prices dipped to $5.16 then climbed back to $5.26 all before 10AM.  The next hour saw prices sink below $5.20 before another round of buying took over.  By 11:40AM, March was at $5.317 –the intraday high. By 1:35PM, had sunk to $5.141 – the intraday low.  A late session rally saw Friday close at $5.214.  In Globex, WTI Crude is 80 cents higher, Natural Gas is up 30 cents, and Heating Oil & Gasoline are both three cents higher.

New England cash prices average more than $23.  The New York cash price is just under $9.

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

Thursday's Natural Gas Futures Contract rose above $5.00

February 14, 2014

On Thursday, the front month NYMEX futures contract opened 13 cents above Wednesday’s close at $4.953.  After declining to $4.918 – the intraday low – prices hovered around $4.96 until 10:30AM, when the EIA Natural Gas Storage Report was published (details below). Consequently, prices immediately broke through this barrier and kept climbing for the rest of the day.  Natural Gas hit $5.10 at 1PM and $5.20 a little after 2PM.  Just before the closing bell, prices reached $5.236 (the intraday high) and Thursday finished at $5.223. In Globex, WTI Crude is down 16 cents, Natural Gas is up 12 cents, Heating Oil is up a cent and a half, and Gasoline is flat.

The EIA Storage Report for the week ended February 7 showed a storage withdrawal of 237 BCF.  This was slightly more than Market consensus of 229 BCF.  This marks the fourth week out of the last five with a 200 BCF + withdrawal.  By contrast, at this time last year there hadn’t been a 200 BCF withdrawal yet.  Total Gas in storage is 1,686 BCF; a shortfall of 863 BCF versus last year and 631 versus the five-year average.

New England cash prices average slightly less than $18.  The New York cash price is around $6.25.

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 price declines slightly on Wednesday

February 13, 2014

On Wednesday, the March 2014 NYMEX futures contract opened at $4.844 – 2 cents above Tuesday’s close.  The morning hours saw steady buying and by 11:30AM, prices topped $5.00.  By 11:35AM, March hit $5.01 - the intraday high.  At this point, the market seemed to re-think $5.00 gas and selling pressure took March down to $4.925 by 12:15PM.  After a brief rally, prices fell for the rest of the trading day and Wednesday closed at $4.822.  In Globex, WTI Crude is down 60 cents, Natural Gas is up nine cents, Heating Oil is flat and Gasoline is down two cents.

The EIA Storage Report for the week ended February 7 is due out at 10:30AM today and the market consensus is for a pull of 230 BCF.  Inventories are already at relatively low levels so if this prediction proves true, it will lend support to the high prices that we have seen so far this year.

New England cash prices have come down and average slightly more than $15.  The New York cash price has come down significantly and is just over $7.75.

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 futures rally on colder weather forecasts

February 12, 2014

On Tuesday, March Natural Gas opened up around $0.13. The warmer forecasts for the balance of February were looking a little less warm and there appeared to be general concern regarding how much Natural Gas had fallen over the previous three trading sessions. After the opening bell, March traded down to an intraday low of $4.651 before rebounding to the opening range. Natural Gas spent the rest of the morning trading in a narrow range around the $4.70 level. When the noon weather updates came out, Natural Gas popped up to the $4.75 level and spent most of the rest of the day between $4.75 and $4.80. The last half hour of the trading day saw a run up to the intraday high of $4.848. Traders continue to react and overreact to each weather forecast update, but there is a persistent concern about end-of-season inventory levels. The early estimates for tomorrow morning’s storage report are shaping up near a consensus withdrawal of 230 BCF.  This morning in Globex, March Natural Gas is up around $0.155, WTI Crude is up around $0.55, Heating Oil is up around half a cent and Gasoline is up around $0.02.

Northeast cash prices eased back on Tuesday, except for New York which rose to around $20.50. New England averaged near $22.50 on the day.

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 continue to move lower as warmer temperatures loom

February 11, 2014

On Monday, March Natural Gas opened down around $0.09 as concerns about warmer temperatures in the 15-day forecast continued to weigh on the market. Over the course of the first half-hour, March traded up to an intraday high of $4.787. From there, we saw sustained selling interest for most of the rest of the day. By 12:30 PM, March hit an intraday low of $4.563. The rest of the day was spent straddling the $4.60 level. It probably won’t take much in the way of colder forecasts to bring back the buyers, but for right now the bears are in the driver’s seat. While analysts are expecting another 200+ BCF withdrawal in Thursday morning’s storage report, the pace of withdrawals could slow dramatically over the next few weeks. Market commentators are very focused on whether storage inventories will end the season above or below the 1,000 BCF level, but there’s nothing magical about that number. Unless March turns out to be very warm, this summer will see a lot of competition for molecules between storage injections and power generation. This morning in Globex, March Natural Gas is up around $0.155, WTI Crude is up around $0.27, Heating Oil is up around a penny and Gasoline is up around a cent and a half.

Northeast cash prices soared again on Monday as another cold front is about to make its way through the region, followed by another winter storm. New England averaged near $27.50 on the day while New York posted just over $20.

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 end week lower

February 10, 2014

On Friday, March Natural Gas opened down around $0.15. In spite of several winter storms rolling across the country, the general trend appeared to be toward warmer temperatures. With the weekend looming, it also seems likely that the bulls were less enthusiastic about piling on a long of length that they would probably want to get out of before the closing bell. From an early low of $4.756, Natural Gas climbed back to the $4.90 level over the first hour of the day. After a brief pause, March rallied up to an intraday high of $4.969 at around 11:15 AM. The rest of the day saw a gradual, orderly sell-off as buyers exited their long positions ahead of the weekend. March hit an intraday low of $4.743 during the last ten minutes of the day before rallying back just a bit at the end. After the spectacular price run-up on February settlement day, the weather has not proven supportive enough to sustain prices above the $5.00 mark. We’re seeing a few analysts predicting a broad-based rally over the rest of the year due to low inventory levels, but so far they appear to be in the minority. This morning in Globex, March Natural Gas is down around $0.09, WTI Crude is down around $0.15, Heating Oil is down around a cent and a half and Gasoline is up fractionally.

Northeast cash markets moved lower ahead of the weekend, but held up fairly well considering the temperatures and loss of industrial load. New England averaged near $22 on the day while New York posted near $12.40.

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 futures move lower after bearish storage report

February 07, 2014

On Thursday, March Natural Gas once again came out of the gate strong, opening up around $0.21. For the second straight day, the bulls ran the price up in pre-market trade only to have the bears attack those gains once the opening bell rang. March peaked at $5.275 during the first five minutes of the day and almost immediately tumbled below the $5.20 level. After around 90 minutes in the $5.10’s, the modestly bearish storage report – see below – sent Natural Gas briefly below the $5.00 mark. The market bounced back to the $5.10’s, but the rally proved short-lived and Natural Gas started to sell off in earnest, giving up the $5.00 mark just before 1:00 PM. March traded all the way down to a low of $4.896 during the final minutes of the trading day. Going back to last week’s February settlement, Natural Gas has been on a roller coaster ride of extreme volatility, following every twist and turn of the weather forecasts obsessively. This morning in Globex, March Natural Gas is down around $0.14, WTI Crude is down around a quarter and Heating Oil and Gasoline are up around a penny.

EIA reported a net withdrawal of 262 BCF in yesterday morning’s natural gas storage report, somewhat below the market consensus. At the same time, EIA revised the prior week’s inventory number down by 8 BCF, effectively changing last week’s withdrawal from 230 BCF to a somewhat less bearish 238 BCF. Inventory levels are now 778 BCF below last year’s levels and 556 BCF below the five year average. This is the earliest point in the season that we’ve seen inventory levels dip below 2 TCF since the winter of 2003/04.

Northeast cash markets eased somewhat on Thursday. Weather forecasts were slightly warmer for today and they’re looking a good deal warmer for the weekend. New England averaged near $24 while New York posted just over $18.

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 tumble after early-morning price spike

February 06, 2014

On Wednesday, March Natural Gas opened up nearly $0.35 as a deluge of buying interest from the early morning hours spilled over into the day session. Cold weather forecasts and concerns about end-of-season storage balances continue to keep this market well-supported and some analysts are even starting to talk about a run at the $6.00 level. A wave of selling kicked in immediately after the opening bell, however. The day’s high of $5.719 was made during the first minutes of the trading day and then Natural Gas crumbled, touching $5.30 just after 10:00 AM. One small rally took prices back above $5.40, but then additional selling took the March contract all the way to an intraday low of $4.99 and a close just barely above the $5.00 level. With the supply and storage picture looking increasingly tight, we would expect volatility to remain high. This morning in Globex, March Natural Gas is up around $0.30, WTI Crude is up around $0.75, Heating Oil is up around a cent and a half and Gasoline is up around $0.03.

Analysts are expecting a net withdrawal of around 270 BCF in this morning’s natural gas storage report. The market consensus is bullish compared to last year’s 129 BCF draw and the five year average of 151 BCF. This morning’s report will take overall inventory levels below the 2 TCF mark at the earliest point in the heating season since the winter of 2003/04.

Northeast cash markets continued to rise on Wednesday as another winter storm blew through the Northeast. New England prices averaged near $27 on the day while New York posted just below $21.

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 up on Tuesday ahead of more cold weather

February 05, 2014
On Tuesday, the March 2014 NYMEX futures contract gained almost 30 cents overnight and opened at $5.193.  Prices rose steadily all day as the latest snowstorm and return of cold weather to the major heat-consuming regions propped up demand.  At 11AM, Natural gas reached $5.25 and hovered around this mark until 12:45PM as buying pressure sent prices just a hair below the $5.40 – at 1:30PM, prices hit $5.397 (the intraday high).  After a round of profit taking took prices to the $5.325 level, a late session of buying saw March close at $5.375.  In Globex, WTI Crude is up 55 cents, Natural Gas is up 8 cents, and Heating Oil and Gasoline are both up a penny .   New England and New York Basis values rose for the winter months.  The snowstorm has caused New England cash prices to average more than $20.  The New York cash price is just shy of $10. 

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