We are looking for the right shoulder of this, admittedly sloppy, emerging head-and-shoulders chart pattern.
From FinViz:
Natural Gas Weekly Update
...Prices/Demand/Supply:
Henry Hub prices rise last week, fall this week. The Henry Hub spot price increased during the first half of the report week, likely in anticipation of cooler weather, and then decreased at the end of the report week. On Tuesday, the Henry Hub price decreased by 93 cents to $5.25/MMBtu, a day after a large decline in the near-month Nymex price. Aside from the large price movements earlier this month, the Henry Hub price has not moved so sharply since January 2010. It closed at $4.84/MMBtu yesterday, down $1.13/MMBtu over the report week. Many other spot prices saw a similar pattern, including Opal in Wyoming, Malin in Northern California, and Katy in East Texas.
Spot points delivering to major Northern population centers saw prices increase more consistently across the report week with the progressive decline in temperatures. The Algonquin Citygate price, delivering to Boston, began the week at $13.83/MMBtu last Wednesday and closed at $29.41/MMBtu yesterday. The Transco Zone-6 NY price, delivering to New York City, rose from $6.10/MMBtu last Wednesday to $24.44/MMBtu yesterday. Chicago Citygate and trading points all across the Midwest saw similarly elevated prices and comparable price movements.
Futures prices fall sharply on Monday and Tuesday, closing down on Wednesday. The near-month futures price for March delivery began the week at $6.149/MMBtu last Wednesday, falling sharply Monday. Despite expectations for cooler-than-average March weather, the futures price fell by $0.690 between Friday and Monday, closing at $5.445/MMBtu on Monday, and continuing to fall sharply on Tuesday. The price decrease from Friday to Monday was the largest near-month futures price movement in more than four years. The March contract continued to decline yesterday, settling at $4.855/MMBtu as the March futures contract expired, giving way to the April contract.
This week's futures price movements downward are inconsistent with falling temperatures Friday through Wednesday. This may be attributed to activity surrounding yesterday's expiration of the March futures contract. Expectations for gas markets may have changed with revisions to near-term weather forecasts (despite the fact that they are still calling for below-average temperatures), and possibly with overall market realignment because of rising production and low-but-adequate storage.
Consumption increases throughout the report week. Consumption increased consistently through the report week as last Thursday's moderate weather became progressively colder. Yesterday was the coldest day of the report week, with total consumption reaching 108.4 Bcf/d. Even so, the average consumption this report week, at 83.7 Bcf/d, was below last week's level by 3.5 Bcf/d (4%).
The largest volumetric drop in consumption came from the residential/commercial sector, which fell week-on-week by 2.1 Bcf/d (4.7%), to 42.6 Bcf/d. Natural gas consumption in the power sector (power burn) fell by a smaller volume but a larger share, decreasing by 1.0 Bcf/d, or 5.9%. Industrial consumption decreased by 0.3 Bcf/d (1.3%), and natural gas exports to Mexico were essentially flat, rising by 0.2%.
Power burn is down in most regions, up in the West. Power burn fell nationally, driven by decreases in the Southeast and Northeast. The Southeast consumed 0.5 Bcf/d (10.3%) less gas for electric generation, followed by the Northeast which consumed 0.4 (11.4%) Bcf/d less gas....MUCH MORE
