Dime

It’s well documented by now that due to low natural gas prices a number of producers and oilfield service companies have been switching drilling efforts and asset buildup from the primarily dry gas Haynesville to “wetter” [that is, richer in crude oil and natural gas liquids (NGL)] plays such as the Eagle Ford and Marcellus. But quite a few in the industry see Haynesville as remaining a strong shale resource and eventually strengthening. It may take a few years, but many expect gas prices to eventually begin making up for ground lost to the soaring crude market.

April natural gas futures settled a dime lower Thursday as the market was forced to price in a withdrawal figure significantly lower than expectations. The Energy Information Administration (EIA) reported that for the week ended March 4, 71 Bcf had been withdrawn from inventories, way less than what the market was expecting. At the end of the day April futures fell 10.0 cents to $3.830 and May shed 9.4 cents to $3.892. April crude oil dropped $1.68 to $102.70/bbl.

October natural gas futures went off the board on Tuesday with a whimper as the contract traded in a range of just more than a dime before expiring at $3.837, up 3.7 cents from Monday’s close. Taking over as the new front-month contract, November futures added 3.5 cents Tuesday to finish at $3.951.

A few flat to a little more than a dime higher western points notwithstanding, most of the cash market continued to sink Monday as what appeared to be the last vestiges of winter weather receded into the distance. Although one forecaster believed winter had one last blast of cold conditions left in it for next week, most traders were discounting any major surge of demand before spring officially arrives March 20.

A few flat to a little more than a dime higher western points notwithstanding, most of the cash market continued to sink Monday as what appeared to be the last vestiges of winter weather receded into the distance. Although one forecaster believed winter had one last blast of cold conditions left in it for next week, most traders were discounting any major surge of demand before spring officially arrives March 20.

Natural gas futures bears took the day off as the April contract traded in a slim dime range before closing out the regular session at $4.708, up 2.9 cents from Monday’s finish. However, with the winter finishing up its long run, traders don’t see too many technical or fundamental factors standing in the way of further declines.

Natural gas futures bears took the day off as the April contract traded in a slim dime range before closing out the regular session at $4.708, up 2.9 cents from Monday’s finish. However, with the winter finishing up its long run, traders don’t see too many technical or fundamental factors standing in the way of further declines.

Prices continued to rise in most of the cash market Wednesday, but a large majority of the increases were about a dime or less. There is still plenty of cold weather from the Northeast through the Midcontinent/Midwest and Plains to the Rockies, and the South is starting to make a much more significant contribution of heating load.

After climbing nearly 35 cents on reduced trading volume Friday, traders added another dime to the February natural gas futures rally on Monday as winter storms and freezing temperatures were expected to engulf the eastern United States later in the week. The front-month contract ventured back above $6 to close at $6.072, a gain of 10.1 cents.