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.
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Near-Flat Mixed Pricing Mostly a Bit Softer
After gains Monday were followed by losses Tuesday, the cash market got back to somewhat of an even keel Wednesday with price movements that were little changed either up or down in most cases but a little softer in a slight majority of cases. Lows in the 30s and 40s would continue to generate a fair amount of heating demand in the Midwest, Rockies, Western Canada and parts of the South, but the rest of the weather outlook called for moderate to merely chilly.
Support Seems Illusory, But Virtually All Points Up
Somewhat improbably, the cash market built upon Friday’s modest gains, which came amidst mixed price moves, with a fairly strong advance across the board Monday. The return of industrial load from its weekend dip was a minor bullish factor, but otherwise reasons for Monday’s upticks were difficult to discern.
Analysts See a Price Base Building; September Falls
September natural gas retreated Thursday following the release of inventory data that was somewhat greater than what the industry was expecting. September lost 7.4 cents to $4.244 and October shed 7.6 cents to $4.257. September crude oil rose 4 cents to $97.44/bbl.
Industry Brief
A hearing at the Arkansas Oil and Gas Commission (AOGC) to consider whether two saltwater injection wells in the Fayetteville Shale are related to seismic activity in the region has been postponed to April 26 from March 29 at the request of the injection well owners, Oklahoma City-based Chesapeake Operating Inc. and Little Rock, AR-based Clarita Operating LLC. The wells are currently shut in and will remain so until at least the date of the hearing and maybe longer depending on what is decided at the AOGC. Both companies maintain that their wells are not related to a recent swarm of earthquakes in the area; however, since the wells were shut in, quake activity has declined somewhat (see Shale Daily, March 17).
Bulls Corralled After Storage Report; March Drops
March natural gas careened lower Thursday following the release of government inventory data showing usage somewhat below traders’ expectations.
Mostly Near-Flat Quotes Signal Forecast Uncertainties
Is the latter half of January going to be extra-cold (quite bullish) or merely seasonable (somewhat bearish)? A lot of money could be riding on making the best strategic trading choices in such circumstances, and a few traders have indicated that they’re not sure what path to follow.
Chesapeake’s ‘Profligate’ Spending, Accounting Scrutinized
Shale giant Chesapeake Energy Corp. “has one of the industry’s best collections of natural gas assets,” but “continuing concerns about the company’s profligate spending” and accounting methods led veteran analyst Philip H. Weiss of Argus Research to trim his recommendation to “sell” last week.
Bulls Throw in the Towel; September Knocks on $4 Door
September natural gas futures entered its final week of trading on a soft note, as traders suggested the market may move somewhat lower before numerous holders of short positions begin to cover and prompt an eventual market rally.
Technicals, Traders Turning Moderately Bullish; Futures Up 10.9 Cents
September natural gas futures managed to gain ground Thursday as a somewhat supportive inventory report brought buyers off the bench, and the resulting price response began to frame a positive technical picture.