Revenues from natural gas liquids (NGL) — particularly those from liquids-rich shale plays — have been like a mega vitamin for anemic dry gas economics, but it’s not the fourth quarter of 2011 anymore, and currently depressed NGL prices are expected to stick around for a while.
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On balance cash markets were unchanged Wednesday in spite of a fire and explosion on a pipeline in Gray County, TX. Weather conditions for the most part were mild limiting both electrical generation requirements as well as heating load. Northeast, Gulf, and California points moved little beyond a penny either side of unchanged. At the close of futures trading July had eased 2.5 cents to $2.421 and August weakened 2.2 cents to $2.474. July crude oil gained 73 cents to $85.02/bbl.
November natural gas rose on heavy volume Thursday in spite of an inventory report that indicated increases not only greater than historical norms but also higher than what analysts expected.
June natural gas futures rose Wednesday as analysts observed that the market was holding at current prices reasonably well in spite of predictions of abundant supply. At the closing bell June had gained 1.6 cents to $4.198 and July was up 2 cents to $4.266. June crude oil soared $3.19 to $100.10/bbl.
March natural gas futures inched higher Friday in a day of lackluster trading. In spite of the market’s ability to hold above $3.80, analysts are sharpening their pencils and counting the next move lower as they see a lack of weather-driven demand eroding prices. At the end of the day March was higher by eight-tenths of a penny to $3.876 and April added five-tenths of a cent to $3.906. March crude oil eased 16 cents to $86.20/bbl.
In spite of another prior-day futures decline, the cash market found enough cold weather in the forecast to justify increases at most locations Thursday.
The market faltered at the finish line of trying to achieve a full week of advancing prices at essentially all points. In spite of rising weekend temperatures in the Midwest, the previous day’s dive of 29.9 cents by September futures following a report of an above-expectations storage injection was able to induce double-digit declines at all but one point Friday. The typical weekend fallback of industrial load was an additional, albeit minor, bearish factor.
In spite of weather maps showing temperatures in the mid 80s or greater in the eastern two-thirds of the U.S. and the previous day’s rebound of 8.3 cents by July futures, cash prices fell at nearly all points Friday. Concerns about the growing storage surplus (and its down-the-road implications) along with the weekend loss of industrial load obviously commanded the most market influence.
July natural gas futures posted a healthy gain Wednesday as traders acknowledged the likelihood that in spite of bearish fundamentals the market has put in a bottom and also observed new buying. July futures rose 12.4 cents to $4.253, and August gained 11.2 cents to $4.424. July crude oil added 56 cents to $71.03/bbl.
July natural gas futures gained ground Thursday in spite of a government inventory report showing injections above trader expectations and inventories well above historical norms. A strong performance by July crude oil, which more than made up for Wednesday’s $2.43/bbl drubbing, also helped the bullish cause.