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NatGas Crashes To April 2012 Lows On Weather, Inventories

Tyler Durden's picture




 

For once, blaming the weather is not a 'joke'. Natural gas futures fell to the lowest since April 2012 as traders reacted to near-record inventories and mild weather that’s pushing back the start of winter demand for the heating fuel.

 

Carnage...

 

To April 2012 lows...

As Bloomberg details

The eastern U.S. may be warmer than usual from Nov. 1 to Nov. 10, according to Commodity Weather Group. Washington might reach 74 degrees Fahrenheit (23 Celsius) on Nov. 5, 12 degrees above normal, AccuWeather data show. The city’s low on that day could be 54 degrees, 10 above normal.

 

Stockpiles totaled 3.81 trillion cubic feet Oct. 16, 4.5 percent above the 5-year average, according to a government report. BofA Merrill Lynch analysts lowered their year-end price target.

 

“The pressure is on here with the lack of weather and the storage situation,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. “It’s really gotten the attention of a lot of investors suddenly just how oversupplied we are.”

More unequivocally good news for American consumers (oh wait).

Charts: Bloomberg

 

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Mon, 10/26/2015 - 11:57 | 6712175 clooney_art
clooney_art's picture

What about propane ?

Mon, 10/26/2015 - 11:59 | 6712185 BandGap
BandGap's picture

Should drop in line w/natural gas.

Mon, 10/26/2015 - 12:09 | 6712233 Serfs Up
Serfs Up's picture

Could this be also be due in part to the Glencore + Sumitomo unwinds that are happening?

Mon, 10/26/2015 - 18:31 | 6714094 Majestic12
Majestic12's picture

"For once, blaming the weather is not a 'joke'."

How's the "algo" weather....?

I am sure this all has nothing to do with sticking it to Russia, Venezuela, Bolivia or anyone else who "dares" to compete with the "empire".

Mon, 10/26/2015 - 12:03 | 6712205 Calculus99
Calculus99's picture

If you've got a good track record of making money in Nat. Gas (sorry, ripping/stealing off clients doesn't count), then you're one hell of a trader because that market is mental. 

Mon, 10/26/2015 - 12:04 | 6712211 taopraxis
taopraxis's picture

I tried trading the energy complex over the summer...huge mistake, one I do not intend to replicate.

Mon, 10/26/2015 - 12:22 | 6712296 rccalhoun
rccalhoun's picture

fucking contango makes natty a continuous short.  everyone is on the wrong side of the boat.

Mon, 10/26/2015 - 12:03 | 6712208 HenryHall
HenryHall's picture

Look for Gazprom to cut off gas supplies to Ukraine in early 2016.

A low low price and Crimea no longer crucially dependent on Ukraine for electricity and one or other Force Majeure reason to cut off supply looms.

Mon, 10/26/2015 - 12:32 | 6712341 AE911Truth
AE911Truth's picture

And the fact that we no longer need fossil fuels for energy.

Research: Keshe KFSSI Blueprint Teaching

Mon, 10/26/2015 - 12:45 | 6712413 Sam Spade
Sam Spade's picture

The total usable storage in the US is around 4.1 trillion cubic square feet, so that's also being factored in as we bump up near that level.  I notice that when the price bottomed in April of 2012 at around $1.93/MMBTU, it bounced hard (like over 40% the following 4 weeks), so word to the wise...

Mon, 10/26/2015 - 12:54 | 6712464 Hal n back
Hal n back's picture

a number of manufacturing processes use nat gas. With manufacturign down,  I would think that economic activity decline has something to do with this, especially at the margin and when storage tanks fill up.

 

Mon, 10/26/2015 - 13:12 | 6712540 El Dorado
El Dorado's picture

Your absolutely correct, for example it is the primary consumable in the production of nitrogen fertilizer.  Fertilizer demand is down as farmers have to accommodate tighter budgets thanks to falling grain prices.  Thank god they have all those gas/diesel savings to help them survive... sarc/

Mon, 10/26/2015 - 13:02 | 6712498 SheepDog-One
SheepDog-One's picture

Wall St traders shocked and outraged about something happening which helps Main St.

Mon, 10/26/2015 - 13:38 | 6712644 Spungo
Spungo's picture

God damn weather! This is an odd case where it really is a weather thing. El Nino years are nice and warm :D

Mon, 10/26/2015 - 14:50 | 6712970 1033eruth
1033eruth's picture

As far as the consumer is concerned, this is certainly not important.  In fact, its IRRELEVANT.  Natural gas prices for the consumer AS A WHOLE (some fuckwit will always point out an exception to the rule), from their gas provider go up.  They never come down.  

Propane is different.  It fluctuates a lot because of the way its delivered.  Natural gas companies are infinitely more regulated and they have to get increases through corporation commissions.    Just do a google search and you will find plenty of NG utilities filing for rate increases this past summer.  

The monthly bill in my area now is $30 a month with ZERO usage and skyrockets from there with any usage and for the winter; prepare to get a bank loan.   Which is why I'm converting to electric whenever practical.  

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