As the retail guys used to say when told by a client to sell some p.o.s. in the account: "To whom?"
Links below.
Most active (Apr.) $2.861, up 4.8 cents.
From Bloomberg:
Relentless U.S. production gains that caught many natural gas traders by surprise have triggered a 30 percent plunge in prices since November.On Dec. 19 we were babbling "While some desks are betting on a cold snap around the New Year it looks as though supply has the upper hand unless there is one heck of a cold snap. $3.598 down 0.044."
Bank of America Corp. says the selloff isn’t over and is telling clients to brace for the possibility of sub-$2 prices for the first time in three years. Gas output will climb to an all-time high of 78.39 billion cubic feet a day this year, an increase of 50 percent over 2005, led by shale reservoirs in Pennsylvania, Louisiana and Texas, government data show.
The number of gas rigs has tumbled to the lowest level since 1993, yet supply has risen steadily because of improved techniques for extracting the fuel. Natural gas for April delivery settled at $2.92 per million British thermal units at Wednesday on the New York Mercantile Exchange, down from $4.456 a year ago. Futures were last below $2 in April 2012 and haven’t traded there for more than a handful of days since 1999.
“Production has definitely surprised,” Francisco Blanch, head of global commodity research at Bank of America in New York, said in a March 10 phone interview. “We have $2.25 as our target for a normal summer, but we could see much lower prices with cool weather” that reduces utilities’ demand for natural gas.
Break Even
In part of the Marcellus reservoir in Pennsylvania, the nation’s most productive gas basin, the break-even price is 38 cents. Some producers in the nearby Utica shale can make money by selling gas at a loss because of profits earned from gas liquids that flow from the same wells, data compiled by Bloomberg New Energy Finance show....MORE
Reiterated on Dec. 22. On Dec. 26 it was "We remain very dubious of anyone pitching long oil and/or gas futures or equities at these levels and/or at this time.".
In the New Year the tone becomes a bit obsessive: "Weather Forecasts Indicating Natural Gas May Not Have Yet Bottomed":
The premise of the piece while well-intentioned is incorrect.
By focusing on the demand side you miss the larger picture of how damn much natural gas is available to the markets.
I mean the kid is right insofar as his analysis goes but the story is on the supply side.
Most active, February's, $2.9420 up 0.004...
Jan. 16, "Apologies for being tardy on this, yesterday's currency action overshadowed everything else.
Our thesis this heating season is: Supply is in control. We'll have knee-jerk upticks but the massive amounts of gas available to the markets are the driver.
$3.064 last, down 0.094".
Jan. 30, "EIA Natural Gas Supply/Demand Report: Rise in Power Burn Offset By Flat Out Production":
Repeating, for new readers, our natural gas thesis for this heating season:
Average temperatures swamped by record supply. We're going lower.On Feb. 5, "Growing Glut Could Push NatGas Below $2 As Winter Fades":
Have I mentioned our working thesis for this heating season?*...
...All together now gang: "Average temperatures and massive supply"
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