Natural gas futures prices rose by 2.0% last week (ending August 2nd to correspond to the data below) then dropped back to close the week 10 cents lower at $2.77.
Prices rose in advance of the Energy Information Administration’s (EIA) Thursday storage report in anticipation of a draw in inventory, which was confirmed in the data release. As a result, the year-over-year storage glut was cut to 13.4%. Continue reading "Natural Gas Producers Pressuring Futures Prices Lower"
The National Oceanic and Atmospheric Administration's (NOAA) Climate Predict Center (CPC) is forecasting a continuation of a major heat wave this week ending July 30th. Nearly every single state is predicted to experience higher than normal temperatures. In some states, such as Washington and Oregon, cooling degree days (CDDs) are forecast to be more than double their normal levels. However, in the two states that burn the most natural gas at power plants, Texas and Florida, the heightened temperatures will be more muted.
Based on NOAA's state-by-state cooling degree day forecast, weighted by natural gas-weighted electricity production, I estimate that CDDs will be 30% higher than normal and 12% higher than in the same week last year.
For the year-to-date, cumulative CDDs are 22% higher than normal but the same as than during the year-to-date in 2015. Continue reading "Heat Wave To Cut Natural Gas Storage Glut"
Natural gas futures prices have risen almost 80-percent from their lows in March, with much of the gain occurring over the past month. Based on my analysis of the Commitments of Traders (COT) reports, issued by the Commodity Futures Trading Commission (CFTC), the vast majority of the buying that propelled prices came from short speculators who covered (bought) to limit further losses. Since early March, they had purchased more than 100,000 futures and options contracts (see graph below). Continue reading "Natural Gas Prices Surging With Dog Days Of Summer Ahead"
By: Adam Fischbaum of Street Authority
Once heralded as the bridge to an oil-free energy future, natural gas seems to have been relegated to stepchild status in the hierarchy of carbon fuels. Why?
It's cheap, clean, efficient and plentiful. That's part of the problem. The Energy Information Administration (EIA), estimate that there are 388.8 trillion (yes… trillion) cubic feet of proven natural gas reserves in the United States. That's a lot of product to be pumped along with the 20+ trillion cubic feet of dry natural gas we pump annually.
And we keep discovering more. Take a peek at a 20-year study of the spot price.
After a couple of flirts with ridiculous prices, we're pretty much back to where we started when I still had hair and wore size 32 jeans.
The other challenge is lack of industry consolidation. The top 10 U.S. natural gas producers control 31% of the market. That's a decent number. But compare that to the top 10 petroleum producers who tap 52% of the market. Thin margins due to low prices don't get companies excited about acquisitions.
So with prices in the toilet and lack of merger activity, can investors make any money with natural gas? The answer is "yes". I've found two companies that are thriving despite challenging sector fundamentals. Continue reading "2 Strong Plays In A Struggling Natural Gas Market"
By: Jim Nelson of Street Authority
The energy market is officially broken.
That's according to the International Energy Agency (IEA).
On November 10, the group announced that oil prices will remain low for a long time.
Next year, the agency is forecasting a barrel of crude will go for just $60... and only $80 by 2020.
For hundreds of U.S. companies caught up in the shale oil boom over the last decade, that's disastrous news. At $60 a barrel, many oil companies will not generate enough revenue to break even. Continue reading "The Winner Of The Natural Gas Boom Isn't Who You Think..."
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