Bulls

Record natural gas use by U.S. utilities is tightening supply/demand balances sooner than the market was expecting, setting the stage for natural gas bulls to come charging back, according to BNP Paribas.

Natural gas bulls already have seen the writing on the wall for exploration and production (E&P) companies’ earnings reports for 1Q2012. Minus those with gas hedging programs or an already solid turn to liquids and oil basins, it’s not going to be a pretty picture.

The “perma-bulls” at Raymond James & Associates Inc. have dialed back their assumptions for the U.S. natural gas rig count and giving in to the inevitable: low prices are taking down rigs in the gas patch. The good news: there’s “blistering” growth for oil and liquids drillers.

The cash market recorded a mix of gains and losses Tuesday, but bulls were slightly in the ascendancy as flat to higher numbers tended to be both more numerous and have larger increases than the falling ones, all of which were in single digits.

Natural gas bulls continue to hear no good news from analysts, who have begun to lower their price expectations for 2012.

July futures recovered from an opening loss but still couldn’t manage to make it into positive territory Wednesday. Bulls and bears seem almost evenly divided, but short-term traders did note a return of commercial buying interest. At the close July had eased 0.4 cent to $4.577 and August fell 0.2 cent to $4.611. July crude oil tumbled $4.56 to $94.81/bbl.

Natural gas futures bulls received the spark they were looking for Thursday after the Energy Information Administration (EIA) reported that only 31 Bcf was injected into underground storage for the week ending April 22. Because most industry estimates heading into the report were for an injection of about 40 Bcf, traders responded by pushing June natural gas futures to a close of $4.571, up 16.3 cents from Wednesday’s regular session close.

Energy analysts are offering no good news to gas bulls that had toasted to the hope for a prosperous new year in 2011.

The energy analysts with Raymond James & Associates Inc. on Monday offered no good news to gas bulls that had toasted to a prosperous new year in 2011.