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NatGas Crashes Most In 10 Months As Polar Vortex Arrival Delayed
Natural Gas prices are down over 11.5% in the last 2 days, falling to their lowest price since January 2013, as a familiar tale of excess production in the face of ebbing demand looms large. As WSJ reports, BNP Paribas' Teri Viswanath notes "the delayed return of cold weather has simply curbed all buying interest," and this was exaggerated by technical selling as the market broke previous support around 3.50. Ironically, given its detrimental impact on GDP, Macquarie points out, "it is increasingly apparent to us that weather will need to bail the market out again this winter - otherwise prices could see material downside during the spring and summer months."
Moar tax-cuts, more discretionary spending!! oh and less employment, capex, and EPS for Oil & Gas stocks...
As The Wall Street Journal reports,
Natural-gas futures slid to their lowest prices this year and entered a bear market Friday, as investors come to grips with surging production that is beginning to push the U.S. toward potential oversupply.
...
“The delayed return of cold weather has simply curbed all buying interest,” said Teri Viswanath, natural-gas strategist at BNP Paribas in New York. “Unseasonably warm weather that persisted through the month of December now necessitates extreme weather conditions to avoid a (gas supply) surplus.”
Analysts said Friday’s selling was partly driven by technically driven trading as the market broke through levels where it previously rebounded.
...
Though the U.S. has begun to draw on natural-gas stockpiles for fall and winter heating needs, continued booming production from U.S. shale fields is helping to replenish supplies. As a result, withdrawals from storage have been smaller than average, and the U.S. has begun to erase a supply deficit that has persisted most of this year, after outsize demand from the severe winter last season dragged stockpiles to an 11-year low.
...
“It is increasingly apparent to us that weather will need to bail the market out again this winter—otherwise prices could see material downside during the spring and summer months,” Macquarie Bank said in a research note. “At this point, winter weather will determine just how low prices can go.”
* * *
Unequivocally good again, right?
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I wonder if and when stocks will realize we are in a depression.
I wonder if and when stocks will realize we are in a depression.
+1. Economies run on energy, so what's this telling us?
A superchaged economy based on cheap energy!
USA has been in a depression since 2005. Gasoline demand has been falling slowly since then and that is probably going to continue permanently.
The price collapse has occurred very quickly in the past few weeks. The reason is removal of price manipulation by speculators, not a sudden collapse in demand or increase in supply. The current is is much closer to a real market price.
My guess is the Fed hadn't specifically included the purchase of natgas contracts into its daily algo shopping basket. Heretofore, there was a more robust bid/ask from real people working at real firms. As the ongoing Depression deepens simultaneous with more collateral trading requirements, private entities are exiting the marketplace, OR they now recognize natgas is going lower. So natgas must be included in the Fed purchase list. Eventually, the Fed will manipulate the prices of everything that is traded. Or the system will crash. Or both.
Yeah,
I'm personally waiting for the 1980's worker pension led activism. Speculators are nearly out of these securities, as seen in the open position polls.
Depression? LOL! Not gonna happen until this changes . . .
http://research.stlouisfed.org/fred2/graph/?g=VeS
Ate about 2 pounds of Buffalo Chicken Dip last night. My natural gas is up an astounding 450% today.
Simple supply vs. demand really. When the manipulation unfolds, all prices will plummet. I can only imagine with everyone at home or migrating to live with Mom and Dad and the millions of available un-heated/cooled commerical RE available, we should soon see utilities drop as well.
I work for a frac-sand company. Our sales are very slow right now - in the high-end resin coated products. The "raw" sand is still selling pretty well. But then, there's market lag, one supposes. Looks like January and February are going to be rough.
And down goes the other half of the energy industry.
The hell are you blabbering about. Services are a leading edge for the production program outlays. If you are not buying exotic proppants, then that is a big screaming alarm for the most overpressured plays seeing their exploration programs cut to nil. They were the first leg down in October following the pathetic 3Q14 results due to bottlenecks, rig scarcity and missed exit production rates. Energy corps followed in Nov to Dec as the oil numbers priced in where rig utilization and pumper multiples were guiding.
Expect credit downgrades shortly for the large caps/supermajors. That will be the down leg which pushes mergers, just like when XOM was forced to merge with Mobil to shore up their cash rich buyback program.
I'm not intentionally trying to be dense, but I believe services in the oilfield are a lagging indicator. To my mind, it goes like this: oil price drops>O&G companies decide to lay down rigs>rigs finish drilling current wells (30 days-90 days)>frac jobs (sand) get done (60-120 days). At least, that is my experience. I'm sure it can work differently for different companies, but the big hit to service companies comes 2-4 months after a severe price drop. Sure, the O&G companies have already demanded 20% price cuts from their service providers, but the big job losses are only just now starting after existing drilling programs are completed.
I work for a snubbing company. Two of our 12 snubbing rigs are working...
For those of you who don't know:
https://www.youtube.com/watch?v=4Q2e5k2iAfE
moar solar
Time to get out your willy warmers folks
Bullish for Kiev Junta.
Darn it! Lucky, inglorious bastards.
http://oilprice.com/Energy/Crude-Oil/British-Oil-Industry-On-The-Verge-O...
Who's next ?
Silver. Single digits.
And then, short-covering, and then the realization that tax revenues have collapsed and all of that debt can't be paid, and then seizure of bank deposts to pay off derivatives, and then...lemme see, how do I get my money out of the system, again?
Maybe, or maybe just a slow drift back down to $5 and the bankruptcy of a large part of the mining industry over the next dacade.
Most of the Mining PLayers are in trouble; that's a different question. I don't believe for a minute you'll see any further drop in Silver Prices.
Oh please dear lord let it go to $0. I would be happy with $0.10 if I had to. I your noodly name I pray. Ramen.
No way. Not gonna happen. Metals trade on fear and uncertainty; this price collapse movie is causing plenty of both; Silver market is steady as she goes; my prediction the low for 2014-15 is already in at $15.50; it's up from here; with the usual breathtaking whoopsies. Please remember this is an opinion, and therefore worth shit.
Thank you for the disclaimer. People have lost their shirt taking investment advice from comments.
Wild price swings, asset bubbles, and rapid devaluations seem logical, as the currency used as the measuring stick has been totally debauched. Once the Fed and their financial repression over everyone and everything ends, history will show just how managed all this bullshit really was.
No such thing as 'fair market price' today.
That's ANTICERAMIC!
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I can speak and read enough Italian to know that this is gibberish spam.
Didn't think I'd see that here. In Italiano, I mean.
He wants to say that his 'nonna' makes $55 an hour on the computer at the post office bank.
Que?
Looks all Chinese to me...
easy 4 u to say...
A true legend has left us.
R.I.P. Joe Cocker.
That seems more important than the daily paper shuffle in these purely manipulated markets.
God dammit! But thanks for the heads up, didn't know. RIP Joe!
This is pretty normal price behavior for natgas given the weather.
I always go long natgas just before Memorial Day so I can catch the huge summer seasonal bounce.
Some how I don't think this will translate to a smaller gas bill for me.
PREDICTION ! NO POLAR VORTEX because they need the prices to crash
or keep believing they can't control the weather .... IDIOTS !
Oh no! Energy gets cheaper, this is the end of the world!
Yes cheaper energy.
However 20% to 50% of the capital expansion of the last 5 years was also in energy, so all that goes POOF.
Lots of bankrupt Texas companies soon.
Wonder if this is a Play to make LNG export look like an industry savior...... And to further stick it in Russia's ass... At $3 a million LNG exports work (barely).....
Last weeks inventories of natty -8.5% of 5 year average......more manipulation of markets....no one producing a real commodity asset is going to be allowed to make money.....Atlas Shrugged is here
I am sure that this will somehow mean higher utility bills here on Long Island.
The bastards still raised my electricity bill by 40% this Nov after raising 20% last year. Nat Gas shortage due to pipeline issues was their b.s. excuse.
Maybe it was not really an excuse? Maybe they had something really minor "go wrong" so that way they can say they really did have a problem.
That is basically what happened with our supplier. The excuse sounded like something really major and complex, but after asking someone I know and trust that works for said supplier, was told that it was basiclally a two day fix and in no way, shape or form should have affected prices...rather it was an excuse that they knew they would be able to use about a year in advance in order to raise rates.
Sons a bitches what really pisses me off are all the bullshit charges like one sees on your fucking cell phone bill. Just make it one fee assholes, we already get bent over without the KY.
The big question: will nat gas frackers still get their loans?
USe already had a polar vortex and last year the vortex started right after New Year. How is this a delayed arrival?
All eyes on Minsk.
Never heard of it? Neither had the Germans.
Minor aside... (a tiny glimmer of good news for some)
What about Propane costs and inventories? Last winter season's polar vortex caused low inventories not to mention high costs to the end consumer. I checked some numbers and thankfully propane is down sharply. Roughly 5% of American households use propane for heating, so it doesn't look like they will get gouged this season as they did the last.
It was pretty hilarious to watch the price get bid up with the early cold spell in Nov. Recall that there was this new "theory" to explain it all too, the Siberia snowfall theory, which posits that big snows in Siberia mean a cold winter in North America, much like last years very cold winter. Except for one thing. The ENSO conditions which are rising in the Eastern Pacific are more consistent with a warmer than normal winter in the US rather than colder. So which won out? I would say the Siberian snowfall guys are looking pretty dumb right now. I only wish that the Jan contract had traded over $5. I had orders there. I did not get short in the $4.70s unfortunately. If it goes below $3 it is probably a decent buy. Of course it will probably just bottom right here at $3.12 basis Jan of course so I do not get in to the upside either. Commodity trading is not easy.
weekly shows natgas at support
http://bullandbearmash.com/chart/natural-gas-weekly-continues-decline-fo...
may see a bounce - USD remains key to this
Never buy a "maybe support" in a psychological bear market. The poster above had the right idea; catch the top extreme and go short. Why he didn't just sell at $4.70; I have no idea. The markets open every day'; you do have to check the price boards once in a while, but I don't see how that makes it difficult. I just closed out my Feeder Cattle Shorts for net $34,500+; and I probably had 45minutes in that whole trade; including sniffing out the top and going back and collecting the money. That's a strongly seasonal market; and this year, or last year, rather, it was run up to the moon by speculation; so I just waited patently; for most of the year really, and sold a double top. Seems easy enough to me.
I've never really looked at a Nat. Gas Chart; so I never know what people are talking about when I read about it. There;s plenty of markets tho. if you decide you don't like that one.
Hey SAT800,
how much are each contract of Cattle? Aren't they one of the few markets left that are open outcry?
USD has zero correlation with Nat Gas which is a purely local market. Maybe has some leverage with oil and even that is doubtful but no relation to NG other than NG is paid for locally in $.
So do we blame this on weather or non-weather?
It's definitely weather and NG shorts cheering for zero until they get ripped apart like they did in October and twice in November.
you need SKILLS to trade this bitch