Daily Market Update

Daily Market Update

Update for Friday, March 19, 2010:
April 2010 natural gas futures are down 2 cents to $4.06. Apr10 light sweet crude oil is down 61 cents to $81.59.

Bullish Factors

  • Coal-to-gas switching
  • Slowing LNG imports

Bearish Factors

  • Technical trading patterns
  • Higher rig count/increasing supply
  • Warm March weather forecast
  • Weak spot pricing

Next-day Power Traded for 3/19/10
Mass Hub
$39.46		 Cin Hub
$31.67

NY Zone A
$29.88
PJM West Hub
$39.36		 ERCOT North
$32.69		 CA SP15
$42.08

Summary:
The bear market continues as the EIA reported a smaller than expected withdrawal from storage of 11 bcf. This is likely the last withdrawal of the season, which will leave storage in a healthy position entering injection season. Upon news of the draw, the market dropped sharply and continued to head lower. The key support level of $4.25 was quickly broken. The next key support level of $4.00 and the market seems ready to test it.

EIA Storage Report for Thursday, March 18, 2010

The EIA reported a withdrawal of 11bcf, which was on the low end of expectations. The bear market continues, with the April 2010 contract dropping throughout the day and the majority of the downward movement occurring after the release of the report.  

  • Storage now stands at 1.615 tcf
  • Last year: 1.655 tcf
  • 5-Year average: 1.542 tcf

Source: http://ir.eia.doe.gov/ngs/ngs.html

Update for Thursday, March 18, 2010:
April 2010 natural gas futures are down 5 cents to $4.24. Apr10 light sweet crude oil is down 73 cents to $82.21.

Bullish Factors

  • Storage deficit
  • Coal-to-gas switching
  • Slowing LNG imports

Bearish Factors

  • Technical trading patterns
  • Higher rig count/increasing supply
  • Warm March weather forecast
  • Weak spot pricing

Next-day Power Traded for 3/18/10
Mass Hub
$39.86		 Cin Hub
$33.92

NY Zone A
$31.00
PJM West Hub
$38.93		 ERCOT North
$35.78		 CA SP15
$48.00

Summary:
The markets were down again yesterday by 4 cents in the prompt month, closing at $4.30. This matches the all-time low set back on June 30, 2004. Gas prices are under pressure as the market looks to the beginning of injection season and as most of the country experiences above-normal March temperatures. The forecast is calling for above-normal temps across most of the country through the next two weeks, with the exception of the deep south.

 

 

Update for Wednesday, March 17, 2010:
April 2010 natural gas futures are down 2 cents to $4.32. Apr10 light sweet crude oil is up 54 cents to $82.24.

Bullish Factors

  • Storage deficit
  • Coal-to-gas switching
  • Slowing LNG imports

Bearish Factors

  • Technical trading patterns
  • Higher rig count/increasing supply
  • Warm March weather forecast
  • Weak spot pricing

Next-day Power Traded for 3/17/10
Mass Hub
$41.30		 Cin Hub
$32.71

NY Zone A
$30.50
PJM West Hub
$38.68		 ERCOT North
$34.63		 CA SP15
$47.60

Summary:
It was another soft day as the bear market continues. Calendar ‘11 hit another all-time low yesterday but Cal ‘12 and ‘13 barely moved. Soft demand and continued strong shale output are the driver of this market. On the bullish side, LNG imports have slowed recently as low prices could be deterring shipments to the U.S.

 

Update for Tuesday, March 16, 2010
April 2010 natural gas futures are flat at $4.397. Apr10 light sweet crude oil is up 22 cents to $80.01.

Bullish Factors

  • Storage deficit
  • Coal-to-gas switching

Bearish Factors

  • Technical trading patterns
  • Higher rig count/increasing supply
  • Warm March weather forecast
  • Weak spot pricing

Next-day Power Traded for 3/16/10
Mass Hub
$43.46		 Cin Hub
$34.05

NY Zone A
$30.25
PJM West Hub
$41.30		 ERCOT North
$34.46		 CA SP15
$49.33

Summary:
Monday was a very quiet day in the market. The entire strip was unchanged. The above-normal temps are continuing to be a bearish factor which is helping to keep our gas storage levels close to last year's numbers of 1.6 Tcf as winter ends. This weeks withdrawal could be the last this season with expectations for a 20 Bcf withdrawal. A key support level for April 2010 contract is $4.30, which is the all-time low set on June 30, 2004.

Update for Monday, March 15, 2010:
April 2010 natural gas futures are down 5 cents to $4.35. Apr10 light sweet crude oil is down 59 cents to $80.65.

Bullish Factors

  • Storage deficit
  • Coal-to-gas switching

Bearish Factors

  • Technical trading patterns
  • Higher rig count/increasing supply
  • Warm March weather forecast
  • Weak spot pricing

Next-day Power Traded for 3/15/10
Mass Hub
$43.11		 Cin Hub
$34.61

NY Zone A
$31.00
PJM West Hub
$41.25		 ERCOT North
$35.93		 CA SP15
$45.48

Summary:
Monday morning forecasts are still showing above-normal temps across the majority of the country through the end of this week.  In addition, above-normal temps are expected for the majority of the country in the 15-day forecast, with slightly below-normal temps in the central U.S. The warm weather forecasts have helped ease storage concerns as the end of winter draws near.

 

 
Direct Energy