Gas Petrospective – September 22, 2011

Nymex

Natural gas prices dropped 6.8 cents per million Btu yesterday, which took prices to new 10-month lows. Here, again, the bottom line was too much supply, poor industrial baseload demand and the approach of shoulder months, which means less demand for electrical generation for either heating or cooling purposes. The map below shows that temperatures are forecast to be predominantly mild next week (and beyond that).

Traders were also looking ahead to this week’s EIA underground storage figures. A survey conducted by Dow Jones suggests a build of 91 bcf. Last year, there was a build of 73 bcf, and the five-year average for this week is a build of 69.4 bcf. The six-year average was a build of 70.17 bcf. Over the last six years, we have had builds of 51 to 93 bcf, so anything more than 90 bcf would eat at the deficit against the five-year average. A build of that much would also eat at the deficit against last year’s levels.

Technical Recap

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Natural Gas Options Report



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