03-05-08 Market Update - I’m beginning to fear the natural gas market is exhibiting some of the same irrational behavior we have come to expect from the crude oil market. While the verdict is still out on that, what we do know is that natural gas is trading at very high levels for this time of year and while the recent fundamental picture leans to the bulls it isn’t as overwhelming as the price action would imply. The settle of 9.443 on February 28th was the highest settle for the prompt month since January 6th, 2006, when the market was in the midst of falling from its post Katrina high. ....
02-07-08 Market Update - Since the beginning of the year the natural gas market appears stuck in a range from roughly $7.50-$8.50 with the March contract currently trading just above the midpoint of the range. From a technical standpoint, a settle above the $8.10-$8.15 area would be seen as a bullish indicator that there may be enough strength in the market to test resistance in the $8.40-$8.50 area. Even if $8.15 breaks, I’m skeptical that $8.50 will be taken out....
01-10-08 Market Update - The February contract rallied from a low o $6.95 on February 27th to a high of $8.209 yesterday as the recent cold snaps have provided a nice boost to this market. More below normal temps are predicted to be on their way, allowing prices to hold firm, at least for the time being. The $8.20 area is an important resistance area for the February contract and the market has tested but failed to break it the past two days.
12-06-07 Market Update -Since taking over the top spot on the board the January contract continued the fade that the December contract began. The market continues to struggle with a bearish fundamental picture while it awaits winter. Right now the January contract appears that it wants to hold above $7.00, rallying this morning about sixteen cents as I type. This week’s storage report should provide a bit of support as the expectation is for a draw larger than last year’s, cutting into the surplus.
11-08-07 Market Update - After an inexplicable rally the first few days of it being in the top spot on the board, the December contract has given up over a dollar in the past four sessions. As always at this time of year the big wild card is the weather and when the first sustained cold will arrive. A sustained cold blast in the first half of December could put enough of a dent in the storage surplus to allow this market to get excited about the potential for the last half of winter, pulling prices up along with it.
10-03-07 Market Update - Natural gas continues to move based on which way the tropical winds are blowing. Right now there are a couple of storms that will bring stormy weather the Gulf’s production area; however, they are not expected to surpass tropical storm strength, thus keeping any damage to a minimum. There may be some temporary production losses due to precautionary evacuations on the rigs; however, these will be minor. Nevertheless, the market is in its typical, “it’s never too early to panic” mode.....
09-06-07 Market Update - Natural gas traded has traded below $6.00 for the past couple of weeks, spending more time below that level than at any one time since last September when prices collapsed to the low $4.00 area. With everyone’s attention turned to even lower prices, it is easy to forget that the market was trading above $7.00 on August 17th and could easily return to those levels if another storm threatens the Gulf. Barring a storm bearing down on the production region the market should meet resistance in front of the $6.00 mark. If prices can cross that level and maintain that level for a couple of days then the October contract could extend the rally to the $6.50’s. In order to push past that mark in the next couple of weeks ....
08-08-07 Market Update - Natural gas continues to struggle to maintain prices above $6.00 as the summer, until the past few days, has failed to live up to expectations. The arrival of above normal temperatures has helped stem the tide of falling prices but unless this turns into a record long heat wave it likely won’t be enough to stave off further weakness down the road; at least not without some help from a tropical storm threatening Gulf supplies. With the peak of hurricane season still a month away, this is still a very real possibility,....
07-05-07 Market Update - This morning sees the August contract testing lower, trading in the mid $6.60’s. First support for August is at $6.55, with $6.20 and $6.00 below that. Not far below $6.00 the market should meet another important test at the $5.75-$5.80 area, which is the low on the perpetual chart from late December. First resistance is at the $6.80-$6.85 area, an area that had been strong support. If the market breaks through $6.85, the next area to watch for is $7.15-$7.20 followed by $7.35. A close over $7.35 is needed to signal that a short term bottom is likely in and to allow for a more extended recovery.
06-08-07 Market Update - The July contract continues to trade within the range established by the market over the past several months. The bottom end of the range continues to be the $6.80 area, with $8.20 the top, up from $8.00 a month ago, so the top of the range has moved up slightly. Within that range there are multiple levels of support for July starting with the $7.50-$7.60 area.
05-09-07 Market Update - While mild weather and a positive storage situation are reasons for the market to test lower over the next month, it appears to me that the market has taken on an overall bullish tone and trading through all those layers of support will likely prove difficult. Even if prices make it to the $6.80 level, it would be surprising for the market to break that level by much, if at all, at least not until some of the summer and hurricane season is behind us.
04-05-07 Market Update - The May contract continues to trade within the range established by the February contract during the last half of its reign on the top of the board. The bottom end of the range continues to be the $6.80 area, with $8.00 the top. Within that range there are multiple levels of support for May starting with $7.40 and closely followed by $7.30 and $7.20. Below $7.20 the next real target is at the previously mentioned $6.80 level.
03-09-07 Market Update - The April contract took over the top spot on the board a little over a week ago and has managed to do nothing other than continue to trade in the range established by the March contract during its time as the prompt month. April began by testing support near $7.00 but was unable to break through, in fact, despite dipping below intermediate support at $7.20 on several occasions; it was unable to settle under $7.20. Thursday’s action was similar in nature with April trading down to the $7.15 area only to settle back over $7.20. So the $7.20 area remains intermediate support until settled under, followed by the major......
02-20-07 Market Update - The market is testing lower this morning as March is trading at $7.313, as I type. The March contract remains stuck in a wide trading range from roughly $7.00 to $8.00 as it waits for significant news to prod it one way or the other. With plenty of storage available to get us through the remainder of winter and with the short term weather forecast turning warmer, one argument says that March is due to test support again.
02-08-07 Market Update -The March contract has made several runs at the $8.00 mark in the past couple of weeks, failing to hold that area each time. Instead March has retreated and shown difficulty in settling much over $7.70. Judging from the heavy selling in front of the $8.00 mark the last couple of moves up, there should be a decent amount of speculative short positions near this level. If another attempt is made on this area, especially if it accompanied by a bullish storage report, will there be anyone left willing to sell it?
01-23-07 Market Update - A settle above $7.45 would be another technical victory for the bulls, possibly signaling a move even higher and at the least signaling a significant shift in the trading range the market had been stuck in. If the market does settle over $7.45, a big assumption for so early in the day, the next big technical target is at $8.25, with a layer of resistance along the way at $7.80-$7.90.
01-17-07 Market Update - After January’s collapse the February contract has held steady in the face of overall bearish fundamentals, betting instead on the weather turning cold before the contract expires and thus justifying its stubbornness. It just may have gotten its wish as cold appears to be on the way.
12-06-06 Market Update -The January contract tested resistance at $9.00 last Thursday after the storage report revealed a larger than expected withdrawal. It was unable to maintain prices above that mark and the disappointed bulls bailed on their new positions on Friday, a sell-off that has continued into this week. January has retreated $1.426, from Thursday’s high to today’s low of $7.623. It has been an impressive and somewhat surprising sell-off that is now nearing critical support.
11-08-06 Market Update - The short term forecast shifted yesterday from predicting above normal temps to at or below normal for much of the country. This bit of news is the reason given for yesterday’s reversal; stopping an early morning slide in prices and spurring a rally. December finished up $0.265 on Tuesday after having trading in negative territory for the first hour of the day session.
10-26-06 Market Update -The market continues to pretend that no storage surplus exists and continues to push higher. This market has, over the past few years, taken the attitude that it will assume the worst and wait to be proven wrong. Such was the case all summer with prices holding higher than they should based on the fear of a hurricane and in spite of record high storage levels. It wasn’t until its hand was forced at October expiration that the front month finally gave it up, with the October contract expiring at $4.201.
10-04-06 Market Update - Since becoming the prompt month the November contract has set new lows for the contract, held well above the perpetual contract lows and attempted to rally. So far, a weak cash market and rising storage levels have stunted the rally as November was unable to settle above $6.00 today after trading above it for a good portion of the day session.
9-08-06 Market Update - The lack of extreme heat during recent weeks and the surprisingly quiet hurricane season has blunted each attempt the market has made to rally. Each serious rally this summer was prodded by a possible threat to the production region from a tropical storm. However, each of the past couple of storm-engendered rallies has fallen short of the previous one. That is not to say that the next threat will not result in a rally exceeding the summer high of $8.619, however, it will likely struggle to reach such heights before a definitive storm track is determined as the market is likely growing weary of false alarms.
For price risk management questions please call your customer representative or e-mail Steve Curlee at scurlee@scana.com.
