Nat Gas...Need this for reference later on.
DJ UPDATE: US GAS: Futures At Fresh 10-Mo Low Amid High Supply
(Adds prices)
By Jeanine Prezioso
Of DOW JONES NEWSWIRES
HOUSTON (Dow Jones)--Natural gas futures tumbled to a fresh 10-month low
Wednesday, losing 4% as traders bet that blossoming storage levels and slack
demand as summer peters out offset potential production interruptions from U.S.
Gulf of Mexico storms.
Front-month natural gas futures on the New York Mercantile Exchange settled
floor trading on Wednesday 23.9 cents lower at $5.578 a million British thermal
units after touching down to $5.544/MMBtu in intraday trade.
Gas futures settled at $5.583/MMBtu on Oct. 13, 2006. The next low prior to
that was reached Sept. 29 at $5.274/MMBtu.
As Hurricane Dean's course veered toward Mexico and away from U.S. Gulf of
Mexico energy infrastructure, the price of September gas futures lost $1.43, or
20%, since Friday's close.
Traders had bet that the storm, which at one point reached Category 5 status,
the most intense rating on the National Hurricane Center's Saffir-Simpson
Scale, would head into the U.S. Gulf of Mexico and disrupt gas production. U.S.
Gulf gas reserves supply about 13% of the nation's supply. Natural gas is
hypersensitive to any production interruptions since the U.S. relies mainly on
domestic supplies to meet demand.
But by Monday morning forecasters showed the hurricane's path due south of
U.S. energy infrastructure.
"What this shows is the market had a tremendous storm premium built in that
was exaggerated," said Guy Gleichmann, president of commodity brokerage United
Strategic Investors Group in Hollywood, Fla. "This exposed that there was
nothing else propping the market up."
Gas in storage is nearing 3 trillion cubic feet at 2.903 tcf, 14.7% above the
five-year average.
Traders and analysts expect government data to show that 30 billion cubic
feet of gas were injected into underground storage during the week ended Aug.
17, according to the average prediction of 13 analysts and traders surveyed by
Dow Jones Newswires. That amount is 24 bcf less than what was injected during
the same week last year, but higher than the 21 bcf injected during week ended
Aug. 10.
The U.S. Energy Information Administration is scheduled to release data
showing the amount of gas in storage at 10:30 a.m. EDT Thursday.
Hedge funds and speculative traders took some profits last week, narrowing
the gap between short positions, or those betting prices would fall, and long
positions, or those betting on price gains.
"You might have seen some profit-taking to service margin calls to other
markets related to subprime lending," said Michael Haigh, director and senior
commodity strategist with Societe Generale Corporate & Investment Banking in
New York. "But most of the volatility can be attributed to more certainty over
the direction of the hurricane."
The front-month September gas futures contract expires on Aug. 29. Haigh said
traders are reserving upward moves in the price for the October contract, which
begins trading as the front-month on Aug. 30 when winter demand is more at the
forefront of the market's mind and while hurricanes are still a factor.
Currently, "supply is strong and demand isn't pushing prices higher," he
said. "There's no reason fundamentally that they should pop up."
FUTURES SETTLEMENT NET CHANGE
Nymex September $5.578 - 23.9
Nymex October $5.790 - 24.0
Nymex November $6.770 - 19.3
CASH HUB RANGE PREVIOUS DAY
Henry Hub $5.72-$5.89 $5.84-$5.98
Transco 65 $5.90-$6.05 $6.07-$6.15
Tex East M3 $6.19-$6.34 $6.28-$6.38
Transco Z6 $6.25-$6.33 $6.27-$6.52
SoCal $5.52-$5.59 $5.55-$5.67
El Paso Perm $5.45-$5.55 $5.45-$5.70
El Paso SJ $5.18-$5.36 $5.26-$5.52
Waha $5.60-$5.67 $5.55-$5.75
Katy $5.65-$5.74 $5.65-$5.90
-By Jeanine Prezioso, Dow Jones Newswires; 713-547-9209;
jeanine.prezioso@dowjones.com
(END) Dow Jones Newswires
08-22-07 1640ET
Copyright (c) 2007 Dow Jones & Company, Inc.
16:40 082207
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