CL Redux
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Sizzling natural gas may be summer fizzle
Prices have risen 35% from their year lows, but some see top
http://www.marketwatch.com/story/sizzling-natural-gas-may-be-summer-fizzle-2012-05-29
SAN FRANCISCO (MarketWatch) â A double-digit pop for natural-gas futures puts them among Mayâs best performing investments, but for the notoriously volatile and weather-dependant commodity, timing is always the trickiest part.
1/ Natural gas slipped under $2 per million British thermal units in April, to its lowest in a decade. It has gained 35% from those levels, to over $2.50 per million BTUs.
It will likely be âvery tough to rally from here,â said Subash Chandra, a managing director at Jefferies in New York who follows the natural-gas market.
Chandra expects prices below $2 per million Btus by September, assuming normal weather patterns and hurricane season, he said.
The latest government prediction on the June-to-November hurricane season calls for a ânear normalâ season this year, with four to eight hurricanes
2/ Prices often rise and fall with weather expectations, <b>as natural gas-fired power plants demand more of the product in the winter and summer.</b>
a) A warmer winter
b) and plentiful production
pushed prices from as high as $3.65 per million Btus in early December to the below $2, worst-since-2002 prices in April.
Prices bottomed for the year at $1.91 per million Btus on April 19.
3/ <b>Recent expectations of a warmer-than-normal summer in the U.S. </b> and some concerns about supplies have pushed prices higher again, although year-to-date prices have plenty of catching up to do.
Natural gas futures are off 14% so far in 2012, and off 43% from the year ago. For the month, however, prices have gained 12%, with June natural gas NGM12 -8.65% closing Fridayâs session at $2.57 per million Btus.
4/ At âsome higher price level, perhaps nearer to $3, coal might be cheaper for some power plants, reducing natural gas demand again,â he added.
As far as production, data shows it may have stopped rising, but has yet to decline by more than a fraction, Evans said.
The recovery from the decade-low was warranted, but âthe upside may be limited by the risk that natural gas could lose its competitive edge over coal at higher price levels,â Evans said. This might mean a period of range-trading. âIâm no raging bull. We still have very high inventories.â
5/ <b> Natural gasâs volatility is largely due to its dependance on weather, Denhardt said. Unlike oil, thereâs no OPEC to balance the market, and it may take âhuge price changesâ to balance it.
Natural gas is also harder to store, he said. </b>
Prices have risen 35% from their year lows, but some see top
http://www.marketwatch.com/story/sizzling-natural-gas-may-be-summer-fizzle-2012-05-29
SAN FRANCISCO (MarketWatch) â A double-digit pop for natural-gas futures puts them among Mayâs best performing investments, but for the notoriously volatile and weather-dependant commodity, timing is always the trickiest part.
1/ Natural gas slipped under $2 per million British thermal units in April, to its lowest in a decade. It has gained 35% from those levels, to over $2.50 per million BTUs.
It will likely be âvery tough to rally from here,â said Subash Chandra, a managing director at Jefferies in New York who follows the natural-gas market.
Chandra expects prices below $2 per million Btus by September, assuming normal weather patterns and hurricane season, he said.
The latest government prediction on the June-to-November hurricane season calls for a ânear normalâ season this year, with four to eight hurricanes
2/ Prices often rise and fall with weather expectations, <b>as natural gas-fired power plants demand more of the product in the winter and summer.</b>
a) A warmer winter
b) and plentiful production
pushed prices from as high as $3.65 per million Btus in early December to the below $2, worst-since-2002 prices in April.
Prices bottomed for the year at $1.91 per million Btus on April 19.
3/ <b>Recent expectations of a warmer-than-normal summer in the U.S. </b> and some concerns about supplies have pushed prices higher again, although year-to-date prices have plenty of catching up to do.
Natural gas futures are off 14% so far in 2012, and off 43% from the year ago. For the month, however, prices have gained 12%, with June natural gas NGM12 -8.65% closing Fridayâs session at $2.57 per million Btus.
4/ At âsome higher price level, perhaps nearer to $3, coal might be cheaper for some power plants, reducing natural gas demand again,â he added.
As far as production, data shows it may have stopped rising, but has yet to decline by more than a fraction, Evans said.
The recovery from the decade-low was warranted, but âthe upside may be limited by the risk that natural gas could lose its competitive edge over coal at higher price levels,â Evans said. This might mean a period of range-trading. âIâm no raging bull. We still have very high inventories.â
5/ <b> Natural gasâs volatility is largely due to its dependance on weather, Denhardt said. Unlike oil, thereâs no OPEC to balance the market, and it may take âhuge price changesâ to balance it.
Natural gas is also harder to store, he said. </b>
Hurricane Season 2012 effect on Crude OIL Prices: ( longer term that coming couple of months )
one take away point from the above Nat. Gas report to CRUDE OIL is as follows.
- <b> The latest government prediction on the June-to-November hurricane season calls for a ânear normalâ season this year, with four to eight hurricanes </b>
so Near Normal Hurricane season JUNE to NOVEMBER this year ( 2012) means , we may not have any <b>Hurricane Premium </b> in CRUDE OIL future prices for the US SUMMER season ..
one take away point from the above Nat. Gas report to CRUDE OIL is as follows.
- <b> The latest government prediction on the June-to-November hurricane season calls for a ânear normalâ season this year, with four to eight hurricanes </b>
so Near Normal Hurricane season JUNE to NOVEMBER this year ( 2012) means , we may not have any <b>Hurricane Premium </b> in CRUDE OIL future prices for the US SUMMER season ..
Long 89.97
-Brent stays below $107, heads for worst month in 2 yrs
http://www.reuters.com/article/2012/05/30/markets-oil-idUSL4E8GU0WI20120530
* Oil prices head for biggest monthly drop since May 2010
* Risk aversion grips markets after Spain downgrade
* U.S. crude stocks forecast up for 10th straight week
* Coming Up: API weekly inventory data; 2030 GMT
1/ Concerns about the debt-laden single currency bloc heightened after Egan-Jones Ratings cut Spain's credit rating<b> for the third time in less than a month </b>as the country's borrowing costs spiralled towards unsustainable levels.
"There is definitely renewed concerns of a contagion in the euro zone with the debt crisis, there is real pressure now on Spain's banks, it's a crisis of confidence," said Ric Spooner, chief market analyst at CMC Markets.
2/ U.S. crude was on track for a more than 13 percent drop this month, also the biggest monthly decline since May 2010, with a surge in domestic stockpiles dragging down prices.
3/ Crude stocks at Cushing, Oklahoma storage hub, delivery point of the U.S. crude oil future contract, <b>have risen to a record high of 46.8 million barrels.</b>
4/ Oil prices also came under pressure as the euro hit a two-year low and the dollar index firmed amid Spain's debt woes.
But oil price losses may be checked by
- supply concerns as Iran's dispute with the West over Tehran's nuclear program remains unresolved
- and easing worries about a messy Greek exit from the euro zone after an opinion poll showed leads for Greece's pro-bailout conservatives.
5/ IRAN TENSIONS
A drop in oil prices was limited by concerns over rising tensions between Iran and the West after talks failed to resolve a dispute over the Islamic republic's nuclear program last week.
"Iran continues to remain a significant factor but for the moment with a short to medium term outlook the focus is on Europe and the demand side picture if the crisis continues to deteriorate," Spooner said.
"But we have been building inventories since Libya's production went offline last year, and with Saudi Arabia pumping more, there is a big enough buffer to deal with any sudden disruption of supplies."
http://www.reuters.com/article/2012/05/30/markets-oil-idUSL4E8GU0WI20120530
* Oil prices head for biggest monthly drop since May 2010
* Risk aversion grips markets after Spain downgrade
* U.S. crude stocks forecast up for 10th straight week
* Coming Up: API weekly inventory data; 2030 GMT
1/ Concerns about the debt-laden single currency bloc heightened after Egan-Jones Ratings cut Spain's credit rating<b> for the third time in less than a month </b>as the country's borrowing costs spiralled towards unsustainable levels.
"There is definitely renewed concerns of a contagion in the euro zone with the debt crisis, there is real pressure now on Spain's banks, it's a crisis of confidence," said Ric Spooner, chief market analyst at CMC Markets.
2/ U.S. crude was on track for a more than 13 percent drop this month, also the biggest monthly decline since May 2010, with a surge in domestic stockpiles dragging down prices.
3/ Crude stocks at Cushing, Oklahoma storage hub, delivery point of the U.S. crude oil future contract, <b>have risen to a record high of 46.8 million barrels.</b>
4/ Oil prices also came under pressure as the euro hit a two-year low and the dollar index firmed amid Spain's debt woes.
But oil price losses may be checked by
- supply concerns as Iran's dispute with the West over Tehran's nuclear program remains unresolved
- and easing worries about a messy Greek exit from the euro zone after an opinion poll showed leads for Greece's pro-bailout conservatives.
5/ IRAN TENSIONS
A drop in oil prices was limited by concerns over rising tensions between Iran and the West after talks failed to resolve a dispute over the Islamic republic's nuclear program last week.
"Iran continues to remain a significant factor but for the moment with a short to medium term outlook the focus is on Europe and the demand side picture if the crisis continues to deteriorate," Spooner said.
"But we have been building inventories since Libya's production went offline last year, and with Saudi Arabia pumping more, there is a big enough buffer to deal with any sudden disruption of supplies."
U.S. OIL INVENTORIES Reuters survey
http://www.reuters.com/article/2012/05/29/markets-oil-idUSL4E8GT1LH20120529
U.S. crude oil stockpiles were<b> expected to have increased
last week </b>as imports continued to be robust, <b>a preliminary
Reuters survey of analysts showed. </b>
<b> Distillate and gasoline stocks were seen little changed. </b>
Oil inventory reports will be delayed due to Monday's U.S.
holiday. Industry group the <b> American Petroleum Institute will
release data on Wednesday at 4:30 p.m. EDT </b> ( 2030 GMT), with the government's report following on Thu rsday at 11 a.m. EDT (1 500
GMT).
a) OPEC output in May hit its highest since 2008 as Saudi Arabia maintained high rates
b) and Iranian shipments <b> did not fall substantially </b>more ahead of a European Union embargo set to start in July, a Reuters survey found on Tuesday.
-----
OPEC output hits new high in May: Reuters survey
http://www.reuters.com/article/2012/05/29/us-opec-oil-survey-idUSBRE84S0N020120529
Supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.80 million barrels per day (bpd), up from 31.75 million bpd in April, the survey of sources at oil companies, OPEC officials and analysts found.
<b> so that is .05 x 30 days = 1.5 Milion barrels /month from Excess MAY output from OPEC </b>
http://www.reuters.com/article/2012/05/29/markets-oil-idUSL4E8GT1LH20120529
U.S. crude oil stockpiles were<b> expected to have increased
last week </b>as imports continued to be robust, <b>a preliminary
Reuters survey of analysts showed. </b>
<b> Distillate and gasoline stocks were seen little changed. </b>
Oil inventory reports will be delayed due to Monday's U.S.
holiday. Industry group the <b> American Petroleum Institute will
release data on Wednesday at 4:30 p.m. EDT </b> ( 2030 GMT), with the government's report following on Thu rsday at 11 a.m. EDT (1 500
GMT).
a) OPEC output in May hit its highest since 2008 as Saudi Arabia maintained high rates
b) and Iranian shipments <b> did not fall substantially </b>more ahead of a European Union embargo set to start in July, a Reuters survey found on Tuesday.
-----
OPEC output hits new high in May: Reuters survey
http://www.reuters.com/article/2012/05/29/us-opec-oil-survey-idUSBRE84S0N020120529
Supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.80 million barrels per day (bpd), up from 31.75 million bpd in April, the survey of sources at oil companies, OPEC officials and analysts found.
<b> so that is .05 x 30 days = 1.5 Milion barrels /month from Excess MAY output from OPEC </b>
Since you are a truthful and good spirited bloke, I will risk asking you a candid question in public: Can you list the reasons, publically or privately, of why you believe you have an edge (or a better edge) trading CL versus trading ES ?.Quote from Laissez Faire:
Nymex RTH bottom is most likely in. IHS bottom held.
Can we see 91,25 by the close?
I sure hope so.
Maybe I have suffered permanent brain damage (likely) and can't currently see reality clearly.
