News & Events

Market Commentary

June 29th, 2020

Natural gas prices jump 15 cents to $1.698/mmBtu as the latest short-term temperature forecasts point to some hotter weather that could lift demand.

Analysts say market sentiment remains bearish despite today’s uptick after prices fell Thursday to a 25-year-low $1.4820/mmBtu.

Weak demand largely due to coronavirus is weighing heavily on the market as industrial gas demand declines,

and would-be foreign buyers of US LNG cancel planned purchases.

That’s causing storage to rise faster than expected, with total inventories now at 3.012T cubic feet, an 18% surplus to the five-year average.

Natural Gas Pares Declines on Storage Rise

June 18th, 2020

Natural gas prices reduce declines, down 0.5% at $1.63/mmBtu after EIA says gas-in-storage rose by 85B cubic feet last week,

which precisely matches the average of forecasts by analysts in a WSJ survey. The number is well below last year’s 111-bcf injection,

and also slightly below the five-year-average rise of 87 bcf, and analysts say that’s because hotter-than-normal

temperatures last week in places like Texas gave a pre-summer boost to demand.

Total storage now stands at 2.892T cubic feet, which is a 17% surplus to the five-year-average and compares to a 19% surplus two weeks ago

Storage Summary

Working gas in storage was 2,892 Bcf as of Friday, June 12, 2020, according to EIA estimates. This represents a net increase of 85 Bcf from the previous week.

Stocks were 722 Bcf higher than last year at this time and 419 Bcf above the five-year average of 2,473 Bcf. At 2,892 Bcf, total working gas is within the five-year historical range.

For information on sampling error in this report, see Estimated Measures of Sampling Variability table below.

Natural Gas Lower Despite Broader Turmoil

June 15th, 2020

Natural gas prices are moving lower in NY, down 3.3 cents at $1.697/mmBtu in conjunction with broader declines in crude oil and US equity futures amid fears of a resurgence of the coronavirus in the US and China.

Natural gas investors are tracking weather patterns to see whether late June and into July may provide hotter-than-normal temperatures that could boost gas-fired electricity grid demand.

The market has overlooked the moderately bullish weekly EIA storage report late last week that showed a slightly-below-normal injection of 93B cubic feet,

which helped bring the storage surplus down to 18% above the average vs 19% the previous week.

Natural Gas Falls on Weather, Coronavirus

June 1st, 2020

Natural gas prices decline 7 cents to $1.78/mmBtu as investors worry mostly-mild spring weather and coronavirus-related factory shutdowns will keep demand muted.

“This market has been looking for some bullish assistance from the weather factor and although weekend updates are still favoring above normal trends across most of the US,

deviations from normal don’t appear sufficient to spur much buying interest,” say analysts at Ritterbusch & Associates.

The analysts say prices could find some support later in the week if an EIA storage report turns out bullish,

but they say sustained price-gains probably won’t happen unless the upcoming summer brings hotter-than-normal temperatures that could support electricity grid demand for cooling.

Market Commentary

May 29th, 2020

Natural Gas Erases Gains, Falls 5 cents to $1.77 Amid Broader Declines in Stock Markets and Oil

Natural gas prices dropped nearly 3% on Friday as inventories built more than expected. Strong production despite continued declines in rig count,

has kept natural gas prices on their heels. The weather is expected to remain warmer than normal for most of the United States which should increase cooling demand.

Softer than expected Durable goods order likely reduced natural gas demand. Orders for durable goods, plunged 17.2% in April after dropping 16.6% in March.

Technical Analysis

Natural gas prices dropped on Thursday declining nearly 3% but bouncing near support which is an upward sloping trend line that comes in near 1.82.

A close below this level would likely see a decline to the June contract lows at 1.60. Resistance on natural gas is seen near the 10-day moving average of 1.89.

The 10-day moving average recently crossed below the 50-day moving average which means that a short term downtrend is now in place.

Short term momentum is negative as the fast stochastic generated a crossover sell signal. The current reading of the fast stochastic is 5, well below the oversold trigger level of 20 which could foreshadow a correction.

Natural Gas Declines Alongside Oil

May 27th, 2020

Natural gas prices decline 2 cents to $1.77/mmBtu, dragged lower by a fall in oil prices and as investors shift their bets into next month’s contract,

since the June delivery contract expires this afternoon. Gas prices have been relatively range-bound in May,

down 8% from the beginning of the month amid continued uncertainty over just how much of an impact coronavirus is having in terms of both supply and demand.

The drop in natural gas demand due to lockdowns hasn’t been extreme compared to crude oil,

but gas production doesn’t appear to be falling significantly, either.

Analysts say mild spring weather will weigh on prices in the absence of other market-moving news.

Natural Gas Rises Along With Oil

May 20th, 2020

Natural gas prices rise further, up 4 cents  at $1.86/mmBtu after hitting a nearly two-week-high on Tuesday,

as risk appetite improves across much of the energy/commodity space due largely to a better-than-expected rebound in demand as coronavirus lockdowns are lifted.

“The gas trade has put in a good performance on the upside during the past couple of sessions as the gas curve has strengthened further,” say analysts at Ritterbusch & Associates.

“The fact that the market continues to hang out near 10-day highs suggests some upside follow through in today’s trade and

possibly tomorrow if the weekly storage data offers a smaller seasonal injection than generally expected.”

Natural Gas Surges as Output Declines

May 18th, 2020

Natural gas prices surge 18 cents to $1.83/mmBtu as data point to a decline in US gas output.

Analysts at Houston-based Tudor Pickering say US gas flows stood at 88.1B cubic feet per day on Sunday, “down from 90.2bcfd on Friday,

with the Northeast accounting for 1.4bcfd, followed by Texas flows down 0.4bcfd.” The analysts caution, however,

that the decline may not last, especially as oil prices push above $30/bbl as this could lead oil and gas producers to get the commodities flowing again.

Additionally, they note weekly EIA storage this week may show another triple-digit rise as LNG demand takes a hit.

Natural Gas Futures Called Lower as Weather-Driven Demand to ‘Drop Precipitously’

May 12th, 2020

With weather-driven demand expected to decline on warming temperatures later this week, and with inventories expected to fill quickly in the weeks ahead,

natural gas futures were down in early trading Tuesday.

The June Nymex contract was off 4.5 cents to $1.781/MMBtu and are on target for their lowest closing price in more than two weeks as investors see increasing signs the commodity is starting to feel a delayed impact from coronavirus.

“The US natural gas market has become the latest victim of the coronavirus,” Price Futures’ Phil Flynn writes in a column for Fox Business.

“The shutdown of economies in Europe and Asia reduced the demand for natural gas.” Natural gas in storage in the US is at a 21% surplus to the five-year average,

and analysts say that could increase as the low-demand spring season progresses.

Natural Gas Futures Down Early as Demand ‘Likely to Plummet’

April 15th, 2020

Against a backdrop of coronavirus-related demand destruction, expectations for milder weather later this month continued to keep the pressure on natural gas futures prices early Wednesday.

The May Nymex contract was down about 2.4 cents to $1.626/MMBtu at around 8:30 a.m. ET.

Over the past few days models have been consistent in showing moderating temperatures later this month following a stretch of colder-than-normal temperatures this week, according to Bespoke Weather Services.

“The overall theme continues to be for a tame, near-normal demand period after April 20, likely lasting through the end of the month,” Bespoke said.

Meanwhile, the market is in need of something that can tighten the supply/demand balance “in order to get any rally going at the front of the curve,” the firm said, pointing to recent Energy Information Administration (EIA) storage reports that have been “very loose.”

“It looks like we are headed for another loose number tomorrow, as demand destruction continues due to the economic shut-downs,” Bespoke said. “There is talk of some partial re-opening of things in a few weeks, but it is unclear if that will actually occur or not.”

After Tuesday’s sell-off, the prompt-month contract could establish a new low for the year by the end of the week, according to analysts at EBW Analytics Group. Tuesday’s selling was attributed in part to “a move out of energy commodities,” they said.

“Nymex crude nosedived, with the front-month contract re-testing support at $20/bbl. The May-July natural gas contracts followed crude lower, with asset allocation managers looking to move funds to sectors poised to earn more attractive returns,” the EBW analysts said.

But the demand outlook for natural gas likely played an even bigger role in the sell-off, they said.

Analysts pointed to a “growing recognition that once the current round of cold weather ends, demand for natural gas is likely to plummet, with the potential for the first triple-digit injection of the year” during the last week of April. “After yesterday’s sell-off, bulls are unlikely to return to the natural gas market soon, opening the door to significant further price declines over the next few weeks.”

As of early Wednesday, a Bloomberg survey was showing a median expectation for a 65 Bcf injection for this week’s EIA storage report, with predictions ranging from 42 Bcf to 78 Bcf.

Last year EIA recorded a 73 Bcf build for the similar week, and the five-year average is a build of 27 Bcf.

May crude oil futures were down 44 cents to $19.67/bbl at around 8:30 a.m. ET, while May RBOB gasoline was trading fractionally higher at around 72.9 cents/gal.