After spending much of June in negative territory, natural gas forward markets ended the month on a strong note, with August gaining an average 7.7 cents between June 23 and 29 as heat is expected to blanket much of the country in the coming weeks to drive up demand, according to NGI’s Forward Look.
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May natural gas is set to open 4 cents lower Friday morning at $3.29 as traders question just how much more upside the market has left in it given currently ample storage. Overnight oil markets rose.
A strong El Nino event in the Pacific Ocean continued unabated last month and is expected to remain strong through the winter, according to the National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center (CPC), a forecast that would further dampen natural gas prices.
Parched California and some parts of the Southwest may get some welcome drought relief this coming winter if current predictions for a strong El Nino effect pushing the jet stream southward holds up. AccuWeather forecasters said the factors contributing to El Nino have strengthened a lot during the past month.
June natural gas is set to open 5 cents higher Tuesday morning at $3.06 as traders see an unfettered path leading to prices another 7 cents higher and weather forecasts turned slightly more supportive. Overnight oil markets fell.
November natural gas is expected to open 2 cents lower Tuesday morning at $3.88 as near-term weather forecasts don’t appear quite as constructive as late last week, yet analysts don’t see a convincing case for a concerted price slide. Overnight oil markets softened.
Temperatures across almost all of the United States will average warmer than normal over the next three months, though the Southeast and Ohio Valley may get some cooler breaks, according to a seasonal forecast released last week by Weather Services International (WSI).
Physical natural gas prices on average rose 8 cents Monday led by strong gains posted by East and Northeast points, hefty screen gains, and buoyant next-day power prices. New England locations proved to be the biggest winners, but eastern points were not far behind. Gulf and California points firmed as well. At the close of futures trading July had advanced 14.2 cents to $3.875 and August rose 13.8 cents to $3.897. July crude oil slipped 8 cents to $97.77/bbl.
Separate reports confirmed the competitiveness of natural gas as a transportation fuel, with the price of compressed natural gas (CNG) maintaining a strong pricing edge over gasoline, diesel and other alternative fuels. At the same time, liquefied natural gas (LNG) is expanding its potential transportation options to include rail.
From oil sands to coal ports to liquefied natural gas (LNG) engines, Wyoming’s energy ties to Canada are strong and should get stronger, Gov. Matt Mead said Friday, previewing a week long (June 12-19) trip north of the border to expand trade relations that now account for $2 billion annually.