DAILY REVIEW OF NATURAL GAS & CRUDE OIL PRICING - ALONG WITH RELATED NEWS / Part 1
Article Index
11/12 17:45 NYMEX natural gas ends mixed, fronts lose with cash
11/12 17:48 Closing NYMEX natural Gas: Choppy Day - Mixed Opinions
11/12 17:48 Moderating weather pressures US spot natural gas prices
11/12 17:51 Canada spot prices lower on storage, warm weather
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11/12 17:45 NYMEX natural gas ends mixed, fronts lose with cash
NEW YORK, Nov 12 - NYMEX Hub natural gas futures ended mixed Thursday in a moderate session, with front months pressured by mild weather forecasts and a softer cash despite Wednesday's supportive weekly inventory report, sources said.
December slipped 3.8 cents to close at $2.394 per million British thermal units after trading between $2.375 and $2.459. January settled 3.5 cents lower at $2.522. Other deferreds ended narrowly mixed.
''Today was a consolidation day - people were still digesting yesterday's failure at resistance ($2.51 basis December) - but everyone's looking at the forecast and getting very cautious,'' said one East Coast trader, noting mild weather expected through next week helped pressure physical prices today and could lead to even softer weekend quotes tomorrow.
AGA said Wednesday U.S. gas stocks fell last week by 24 bcf, well below Reuter poll estimates for a five to 10 bcf draw. Overall stocks slipped to 256 bcf, or nine percent, above a year ago.
WSC expects normal to slightly above normal temperatures in the Northeast and Mid-Atlantic Thursday through Monday. In the Southeast and Florida, readings are expected to average normal to slightly below normal through Monday.
In the Midwest, temperatures are expected to fluctuate on either side of normal for the period. In Texas, normal to slightly below normal temperatures Thursday through Saturday will moderate to slightly above normal Sunday and Monday. The Southwest will mostly see normal to slightly above normal readings through Monday.
Technical traders noted December managed to hold key support today in the mid-$2.30s, leaving the spot contract in a range between $2.35 and the low-$2.50s.
Below $2.35, chart traders pegged next support at last week's $2.24 low and then at the September 2 low of $2.14.
Resistance was seen first at yesterday's high of $2.51 and then at the recently-formed double top at $2.63-2.64. Major selling should emerge at the autumn highs at $2.715-2.719.
In the cash Thursday, Henry Hub swing quotes slipped about a dime to the low-$2.20s. Midcon pipes lost a similar amount to about the $2.20 level. In the West, El Paso Permian tumbled 15 cents to the mid-to-high teens.
Swing gas at the Chicago city gate was 10-15 cents lower in the low-$2.40s, while New York was quoted in the mid-$2.40s, down almost a dime.
The NYMEX 12-month Henry Hub strip eased 0.7 cent to $2.297. NYMEX said an estimated 54,319 Hub contracts traded today, up from Wednesday's revised tally of 46,127.
Further Commentary
11/12 17:48 Closing NYMEX Natural Gas: Choppy Day Highlights Mixed Opinions
New York-Nov. NATURAL GAS FUTURES FAILED TO sustain an early afternoon rally attempt and ended near late session lows.
While the market continues to find a strong bid at lower prices, the rallies were limited by a lack of follow- through buying. Weakness in the cash market ahead of the weekend and warming temperatures definitely contributed to the weak futures tone, traders said.
Cash prices were generally a dime or more lower today at many locations as buyers stepped away from the market.
The natural gas market opened lower and quickly set early session lows in the first five minutes of trading this morning. Traders noted there were more buyers than sellers waiting for December natural gas futures below the $2.390 lows set in late trading Wednesday. December hit a low of $2.380 this morning but uncovered both trade and fund buying, they noted.
Traders noted that the market has had a difficult time moving back into the plus column today, much less making a run at the ACCESS high hit Wednesday afternoon at $2.459 right after the release of the weekly industry inventory report.
"When it (December futures) didn't sustain the rally above $2.430, that was a signal to lighten up," one floor broker said this afternoon.
Some traders attributed the failed rally attempt to the inability of December to gain on January futures.
Traders agreed that the weekly American Gas Association (AGA) inventory report Wednesday afternoon was a positive surprise but was offset by the warmer temperature outlook in the National Weather Service's 6- to 10-day outlook late Wednesday.
Still, traders said the warmer outlooks were one of the key factors in Wednesday's retreat and the draw on gas stocks this past week was a positive development.
Traders agreed that the draw on stocks last week despite few incentives to draw on stocks and instead pull from the spot market suggests usage was better than expected. But others said the reason for the draw was the fact that stocks were already near record levels and there simply was not any room to add to storage positions.
The AGA report signaled the beginning of the withdrawal season has started. Gas stocks were reported down 24 billion cubic feet (bcf) to 3,070 bcf. Most traders were looking for a small build in stocks but there were some predicting as much as a 39 bcf draw on stocks. The draw on stocks this past week was right in line with the four-year average of 22 bcf. Traders also noted that stocks are still well above the average of 2,872 bcf on hand this time of the year. Four years ago, stocks of gas in storage rose 11 bcf to a record peak 3,099 bcf.
Chart: NYMEX HENRY-HUB NATURAL GAS PRICE
oilworld.com
Moderating weather pressures US spot natural gas prices
NEW YORK, Nov 12 - U.S. spot natural gas prices were pressured Thursday by milder weather and prospects for more of the same next week, industry sources said.
''It's all weather-related again,'' one Midwest trader said, noting temperatures were beginning to moderate in the central U.S. following cold and windy conditions earlier this week.
Gas prices at Henry Hub were quoted widely at $2.18-2.25 per mmBtu, indicating a loss of about 12 cents from Wednesday.
In the Midcontinent, swing prices slumped to about $2.19-2.20, off about 11 cents from Wednesday's levels.
Also feeling pressure from the milder weather was the Chicago city-gate market, where prices fell more than 10 cents to the low-$2.30s.
In west Texas, Permian Basin gas traded at $2.14-2.19, while the San Juan market hovered around $2.17, sources said.
Similarly at the southern California border, prices fell about eight cents to $2.40-2.50.
Maintenance is expected to be completed today at Transwestern's WT-2 compressor station, which is affecting deliveries south of the station on the west Texas lateral.
In the East, New York city-gate prices followed Gulf and Midcontinent values lower to the mid-$2.40s.
Weather Services Corp.'s forecast starting next Tuesday shows normal weather throughout most of the U.S., with slightly above-normal temperatures seen in the Great Lakes region and southern Florida and below-normal temperatures in southern Texas.
AGA said Wednesday U.S. gas stocks fell last week by 24 bcf, pushing stocks to 256 bcf, or nine percent, above a year ago.
Canada spot prices lower on storage, warm weather
CALGARY, Nov 12 - Canadian natural gas spot prices softened Thursday amid warmer weather in Alberta and high storage levels in the U.S., industry sources said.
Warm west winds in southern Alberta, known as a chinook, pressured prices down as temperatures rose, one Calgary-based marketer said.
Prices at Alberta's AECO storage hub were down about two cents to C$2.57/2.62 per gigajoule.
The December contract traded at C$2.82/2.87 per gigajoule, while December-March winter terms were at C$2.91 per GJ.
Trade at Westcoast Energy Station 2 compressor, tracking AECO, was off about 11 cents on the day, to C$2.60/2.65 per GJ.
At the Sumas/Huntingdon and Kingsgate export points, prices were down about 10 cents Thursday to US$1.95/2.00 per million British thermal units.
Export prices were lower across the board as some gas ticketed for storage in the northeast U.S. was turned back into the system, marketers said.
Lower NYMEX pricing on the day also put downward pressure on prices, they said.
To the east, trade at the Niagara export point was quoted at US$2.40 per mmBtu, down about 15 cents from Wednesday.
The lower Alberta prices are not expected to last beyond the next two days, as supply remians tight and the chinook's warming winds will fade over the weekend, a marketer said.
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