Energy Prospectus

i can't find a good reason for this. anybody see one?

Sometimes there is not a reason other than more sellers than buyers. Today is a good day to add AR, GPOR and RRC to your portfolio.

from phil flynn

"Natural gas retreated big time as a report on production sent buyers running for cover. The Wall Street Journal reported a rebound in production since the start of July. U.S. natural gas production so far this month has averaged 70.8 billion cubic feet a day, according to Platte Analytics, an increase of 350 million cubic feet a day from June’s average."

http://www.investorvillage.com/groups.a ... d=16147175

From the Mobius Risk Group report dated 7-5-2016

The natural gas market returned from the July 4th weekend with a definitively bearish view, and prices at the front of the curve fell by $0.223/MMBtu. The closing price for August futures was $2.764, and almost all of last week’s gain was erased in one trading session. For reference, August futures closed at $2.741 last Monday June 27th.

After six straight weekly gains, it stood to reason that a correction was in order for natural gas prices, and approaching $3.00 late last week was likely reason enough for traders to exit bullish positions with even the hint of weaker fundamentals.

The balance of 2016 wasn’t far behind in terms of selling pressure, and the loss of $0.20 pushed the closing price to $2.897. Calendar 2017 was not immune to the weakness, and the loss of $0.067 led to a close of $3.154.

The ever steepening backwardation witnessed last week was diminished today as calendars 2018-2020 felt far less selling pressure. Calendars 2018 and 2019 each lost approximately $0.025. Their respective closing prices were $3.022 and $2.995. Calendar 2020 declined by $0.015 and closed at $3.047.

Aggressive downside pressure at the front of the curve may have kept producers at bay in longer dated tenors, as a “wait and see” approach to layering in additional hedges was employed. In recent weeks the front and back of the curve have rarely moved in tandem, and despite being lower on the day, calendars 2018-2020 could be considered resilient overall. Each of these strips has remained in a relatively tight range since early June, and calendar 2018 has been particularly tight with a low of $2.98 and a high of $3.056.

Natural gas production rebounded over the weekend, as Northeast output led the way higher. A processing plant in West Virginia returned to service and fueled an increase of 0.3 Bcf. Rockies production was also higher over the weekend as both Wyoming and New Mexico appeared to have higher daily output.

In addition to marginal increases in production, publicly available storage data provided an early glimpse at what next Thursday’s EIA storage report may look like. This preliminary indication suggested an injection of more than 55 Bcf, and if this were to occur it would be markedly bearish versus the prior 2 weekly reports. More data will need to be collected before expectations can be narrowed, but for now this data source can be considered another driving force behind today’s price weakness.

Rounding out the fundamental rationale for today’s sell-off was higher nuclear power generation. Over the weekend nuclear power output increased by approximately 3 GW versus last week’s average, or the equivalent of 0.54 Bcf/d of gas demand.