12.21.09
EIA Releases Price Report
EIA price report notes first gas storage withdrawal of the heating season
EIA Releases Price Report
EIA price report notes first gas storage withdrawal of the heating season
The Energy Information Administration reported the first gas storage withdrawal of the heating season on Thursday (12/10), a 64 bcf pull that sent the NYMEX gas futures contract 40 cents higher to settle at $5.298/mmbtu. The 6.2% gain was the market’s reaction to a soundly above consensus expectation, which was quoted between 40 and 48 bcf triggering an immediate surge in futures prices.
Storage was not the only factor in the sharp increase in prices as cold weather in the East and short-covering by funds pushed natural gas to an 11-month high. Traders are wary of the high prices and acknowledge that cold weather will do nothing to alleviate the losses seen in industrial demand. However lower temperatures will increase space-heating demand and that may keep prices at these levels in the short-term.
Storage was not the only factor in the sharp increase in prices as cold weather in the East and short-covering by funds pushed natural gas to an 11-month high. Traders are wary of the high prices and acknowledge that cold weather will do nothing to alleviate the losses seen in industrial demand. However lower temperatures will increase space-heating demand and that may keep prices at these levels in the short-term.
Learn more here: http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html