Natural gas
Posted: Fri May 11, 2012 6:19 pm
Working gas in storage was 2,606 Bcf as of Friday, May 4, 2012, according to EIA estimates. This represents a net increase of 30 Bcf from the previous week. Stocks were 799 Bcf higher than last year at this time and 803 Bcf above the 5-year average of 1,803 Bcf.
Although we still have a lot more gas in storage than the 5-year average, the amount of gas going into storage the last few week has been encouraging. Thus the recent run up in NYMEX futures contracts for gas. However, this is primarily due to several nuclear power plants being down for maintenance. Those plants are coming back on-line soon and the natural gas being used for power generation may fall, meaning storage reports could turn bearish.
I would love to see natural gas push over $3/mcf but I doubt we will see it this summer. I still expect gas prices to tank in August & September. Stay heavily weighted to oil my friends.
I remain bearish on natural gas for at least the next six months. We'll need a colder than normal winter to reduce the glut.
Although we still have a lot more gas in storage than the 5-year average, the amount of gas going into storage the last few week has been encouraging. Thus the recent run up in NYMEX futures contracts for gas. However, this is primarily due to several nuclear power plants being down for maintenance. Those plants are coming back on-line soon and the natural gas being used for power generation may fall, meaning storage reports could turn bearish.
I would love to see natural gas push over $3/mcf but I doubt we will see it this summer. I still expect gas prices to tank in August & September. Stay heavily weighted to oil my friends.
I remain bearish on natural gas for at least the next six months. We'll need a colder than normal winter to reduce the glut.