NG prices are all about the weather and the near-term weather forecast for the U.S. has turned bearish. This Thursday's gas storage report should show a draw of approximately 200 bcf, which will put us in much better shape than last year at this time. Storage levels will be about 210 bcf below where they were on the same date last year.
However, storage will remain significantly above the 5-year average and we are running out of winter. I now think the front month NYMEX contract for March may dip to $3.00/mmbtu. Better than last year but still weak. This is bad news for coal as more utilities will shift to NG for power generation.
Investors should stay heavily weighted to oil.
Natural gas price falling
Natural gas price falling
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group