Although influences such as weather forecasts and record-setting storage inventories were on the weak side, only a couple of points (OGT in the Midcontinent and NOVA Inventory Transfer in Western Canada) were lower Tuesday.
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Drop in Futures Fails to Stick Despite Sizeable Storage Build
December natural gas futures slipped lower Thursday following the 10:30 a.m. EST release of Energy Information Administration (EIA) data showing an increase in natural gas inventories somewhat greater than what traders were looking for. However, the blip lower proved to be short-lived as the front-month contract rebounded higher before closing at $3.649, down just three-tenths of a penny from Wednesday’s regular session close.
November Futures Drop at Expiration; December Seen Weaker Still
November futures expired on a weak note Thursday as traders factored in a greater-than-expected increase in storage inventories. The report by the Energy Information Administration showed an increase of 92 Bcf, about 7 Bcf greater than what traders were looking for. At the end of trading November had shed 6.6 cents to $3.524 and December had lost 1.1 cents to $3.764. December crude followed an ebullient equity market higher and gained a stout $3.76 to $93.96/bbl.
Transportation Notes
Saying its system was operating at high inventories and its two storage fields (Bear Creek in northwest Louisiana and Muldon in Mississippi) are at maximum injection capability, Southern implemented an OFO Type 6 for long imbalances Thursday until further notice. The pipeline said it was highly likely that the OFO would continue through Friday, but a further extension for Saturday was “too close to call.”
Oil, Gas Stocks Continue Slide as Dow Falls
The pummeling of oil and natural gas producer stocks, which began last week, continued Monday as the Dow Jones Industrial Average plunged 634 points on the first day of trading after Standard & Poor’s (S&P) late Friday downgraded the United States credit rating from “AAA” to “AA+.”
Futures Retreat as Bulls Are Pummeled by Stout EIA Storage Data
Expiring June natural gas futures closed lower Thursday as market bulls were hit by a government inventory report showing a build in inventories above what they were looking for. At the close June had settled 5.3 cents lower at $4.326 and July futures were down 6.3 cents to $4.360. July crude oil fell $1.09 to $100.23/bbl.
Futures Drop on Eve of Inventory Data
June natural gas futures posted nearly a double-digit loss Wednesday as traders discount expected additions to inventories below historical norms and note a weakening technical outlook. At the close June had fallen 9.3 cents to $4.577 and July had weakened 9.4 cents to $4.644. June crude oil swooned $1.81 to $109.24/bbl.
Bearish Consensus Building; May Falls Again
May natural gas futures continued to retreat Tuesday as traders were inclined to sit on the sidelines and await Thursday’s Department of Energy (DOE) report on inventories. Some see prices eventually reaching $4.00. At the close May had fallen 5.8 cents to $4.231 and June skidded 5.9 cents to $4.304. May crude oil shed 13 cents to $108.34/bbl.
Bears on the Prowl Following EIA Report; April Retreats
April natural gas futures continued lower Thursday following a brief jump as traders digested a report showing an 85 Bcf decline in natural gas inventories, in line with earlier estimates. By the end of the day April was down 4.0 cents to $3.778 and May had fallen 3.5 cents to $3.859. April crude oil fell 32 cents to $101.91/bbl.
Bastardi Warns of Even Colder Winters to Come
Natural gas inventories could become a lot tighter and prices could soar much higher in the coming winters if predictions from AccuWeather.com Chief Long Range Forecaster Joe Bastardi prove true.