By Spencer Jakab
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Crude giveth and crude taketh away when it comes to natural gas futures prices on the New York Mercantile Exchange lately.
April futures dropped by 19 cents to settle at $5.375 per million British thermal units as the entire energy complex, and commodities more broadly, suffered a sharp selloff. Crude was off 2.35% and copper had its biggest drop in five years, down over 5%, as the dollar continued its massive rally against currencies of major trading partners. Other than technical factors, there
didn't seem to be any specific news affecting natural gas.
"The market's feeling some negativity from the sharp reversal in energy today," said Guy Gleichmann, senior trader at U.S. Investment Group in Hollywood, Fla.
Traders will now focus on both the fortunes of the broader energy complex and on Thursday's weekly report on natural gas storage.
The weekly Dow Jones survey has a consensus expectation of an 111 Bcf withdrawal for the week ending Feb. 27. The 18 predictions ranged from a withdrawal as low as 97 Bcf to as high as 145 Bcf, with a median expectation of
107 Bcf.
"It looks like we're going to get a number that starts to represent a coast out of winter," said Charlie Sanchez, natural gas analyst at Houston based Gelber & Associates. "We're still headed for what appears to be 900-1,000 Bcf for the end of the withdrawal season," he said.
A draw of 111 Bcf would mean that the remaining five weeks of the heating season would have to see withdrawals from storage of only 32 Bcf to break below the 1,000 Bcf total ending storage barrier.
Continued warm temperatures in key heating regions combined with the drop in futures kept physical gas under pressure. Benchmark prices on the Henry Hub
were in a range of $5.25-$5.38/MMBtu versus $5.33-$5.42/MMBtu Tuesday.
The back months fell slightly less than April futures on Nymex. May was 18.5 cents lower at $5.452/MMBtu and June was 16.7 cents lower at $5.495/MMBtu. |
