Ugly

Where natural gas prices are concerned, last year’s “worst case” (gas below $3/Mcf) is this year’s “reality,” and the outlook for the net 12-24 months is “exceedingly ugly,” according to the buzz at Raymond James & Associates Inc.’s recent Institutional Investors Conference.

The 2009 natural gas price outlook is “still very ugly” and given the current over supply, even a colder-than-normal winter is unlikely to prevent a gas price collapse in 2009, Raymond James & Associates Inc. said last week.

The 2009 natural gas price outlook is “still very ugly” and given the current over supply, even a colder-than-normal winter is unlikely to prevent a gas price collapse in 2009, Raymond James & Associates Inc. said Monday.

Prices declined across the board again Thursday, but things could get really ugly Friday after the Energy Information Administration reported a heavily bearish storage injection of 108 Bcf for the week ending Sept. 8. The announcement induced a plunge of 55.7 cents by October futures, causing the prompt-month contract to explore sub-$5 territory for the first time in two years (see futures story).

Tropical Storm Bertha, which made landfall in southeastern Louisiana Monday morning before being downgraded to a tropical depression, had no impact on production and provided no impetus for the September natural gas futures contract to stage a rally. Instead, September plunged sharply lower at the open and proceeded to bust through prior support in the high $2.70s before resting at $2.678 at the end of the day, the lowest level on the spot continuation chart since the first week in March.