Daily GPI / NGI All News Access

Active Trading by Locals Sends Futures Lower

Active Trading by Locals Sends Futures Lower

Adding to the price erosion that began last Tuesday, natural gas futures tumbled lower at the New York Mercantile Exchange Monday as unsupportive cash market values met with heavy local selling. However, when a second wave of selling failed to materialize, speculative traders were forced to cover shorts into the close yesterday, sources said. The August contract finished at $2.144, down 1.9 cents on the day.

A Houston marketer insisted the most dominant sign of weakness was cash prices, which traded down from weekend levels. Gas for delivery at the Henry Hub was among the biggest losers, slipping 4 cents to $2.11. And the outlook doesn't get much better. "Cool weather all up and down the East Coast this week is going to put a crimp in gas demand for electric generation. In fact, the only panic you will see is from utilities that will be struggling to meet their minimum daily [gas] requirements," he said.

Bulls, on the other hand, are not ready to throw in the towel quite yet and look for this week's storage report to bail them out of a increasingly dismal price scenario. Early market banter is centered on a net injection of 61-75 Bcf, which would turn the oft-quoted year-on-year surplus into a deficit. Last year the market put 93 Bcf into the ground, making 76 the magic number this year's refill will be measured against. Anything less will turn the year-on-year surplus to a deficit for the first time since January 1998.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus