tradeby, The NG injections are going to be small for the next few weeks and maybe up to Sept. but, looking at the big picture, NG storage is exactly 600 BCF above levels for the same week last year. If these higher prices create more production then most likely we'll see NG come down in price, especially if this warm fall which is currently predicted keeps draws small. So much can happen.
Any stock or commodity will go against fundamentals due to profit taking or the shorts getting squeezed. These moves can and do happen at any time.
According to a 2015 Government Accountability Office report, five LNG facilities will be operational by 2018 with the ability to export almost 10 billion cubic feet (bcf) of natural gas a day. This “constitutes about 12.4 percent of expected U.S. natural gas production26 and approximately 18.1 percent of the world’s expected LNG capacity in 2020.” If operating at full capacity, 100 LNG tankers will be needed.
I'm not sure how many LNG tankers have left Louisiana but, the last I read there had been six. That was a couple months ago so, more could have left port than six. LNG exports are a long way from needing 100 tankers to keep up with demand. This is how misleading some information can be to an investor.
Keep in mind that the world oil supply is still 1 million barrels a day more than demand. If current oil prices stop production from falling further, then I'd think the glut scenario will be back in focus taking oil down. Just a thought. Time will tell.
China. Not so long ago I read that 48% of U.S. oil imports come from Canada. I though the wildfires might affect Canadian oil exports but, that didn't happen. I suspect that was due to oil storage being so high everywhere that keeping exports up isn't a problem. Even though U.S. oil production is down 1 million barrels a day vs. one year ago, regulating U.S. imports is what has been controlling the price of U.S. oil. Look at what would happen to U.S. oil storage if U.S. oil imports was cut by another 700,000 barrels a day. The U.S. draws from oil storage would jump to 10 million barrels a week. It's all possible but, highly unlikely with the world awash with high oil storage levels.
Today the oil pro's are talking about oil going up due to a 4 million barrel draw from storage. What they fail to mention is that oil imports were down 800,000 barrels a day. If the oil imports would have been the same as the previous week there would have been an add to oil storage of over 1 million barrels. The price of U.S. oil can be regulated so easily by imports that it's scary. Who makes the oil import decisions? I wish I could find out. Will oil imports be up next week sending oil prices down again. Go ahead, take a guess at it.
Now there's talk of oil workers going on strike in Venezuela and Argentina. Oil workers going on strike in Norway could just be the beginning. So far it's all talk but, could turn into reality. Time will tell.
bogwand, That's trading. The last time DGAZ went from $10 to $33, I made out good but, I've been jumping in and out of DGAZ with this last bull run losing some of the profits made previously. I'm confident that when NG prices go high enough, producers will lock in at those profitable prices and pump away before their competitors beat them at market share. Time will tell.
I missed out on this NG bull run. The hot weather was expected but, the nukes being down and unplanned pipeline maintenance added fuel to the bull run. Next, when will these higher prices start to pick up production and bigger question yet, when will the profit taking start for the NG bulls as all the NG shorts have covered their positions. I would imagine NG prices will continue to climb if production doesn't pick up. Now there's talk of a second El Nino winter since the Pacific isn't cooling as originally expected. Possible scenario: NG prices are up so, typically production would go up. If NG storage ends over 4000 with production up and another warmer winter, that should create a bearish environment for NG. Time will tell.
This trend coincided with the steep decline of Henry Hub gas prices, which average $1.70/MMBtu in March, the lowest monthly average since December 1998. Since then, gas prices have rallied significantly, to an average this month of $2.46/MMBtu, a 45% increase since March. Our most recent Henry Hub price forecast has prices averaging above $3/MMBtu by December.
This is looking like 2012 all over again with the price of NG. NG rarely moves in a straight line though. The early estimates for the next four NG injections is only 187 BCF. That would put storage at 3290 with about 13 injections remaining. In 2012 NG storage neared 4000 and NG still kept climbing. We'll see what producers do with production as cash prices climb. Time will tell.
I agree. The point being: Some cycles take a couple months and others take a couple years. I'm on the wrong side of this trade. I bailed with most of my DGAZ at $15 at a loss but, that's trading. We'll have to see what producers are going to do with these higher prices.
Historical reversal levels:
March, 1999: $1.77
December, 2000: $8.91
August, 2002: $3.09
February, 2003: $7.70
November, 2003: $4.49
October, 2005: $13.63
November, 2006: $4.90
June, 2008: $12.68
September, 2009: $2.99
January, 2010: $5.84
April, 2012: $1.95
February, 2014: $5.98
March, 2016: $1.67 (spot)
There's something to think about.
So far I've seen estimates from 40 to 66. What does this really tell us----nothing as to where the price of NG will go this week. We don't know how much gas to coal switching is happening. We don't know if these higher prices are increasing production. We just don't know until it happens. I think if the injections stay above 50 with this record heat, as summer abates, so should the higher NG prices with storage so high. It'll still all boil down to what the producers are going to do.
It's all going to boil down to what price will make producers step up production. Stepping up production could be in the works now and we'll hear about it after the fact.
If oil would have been down this morning, it would have been due to rising rig count and supple glut. The AP will print that when oil turns down.
Oil is up due to the fear of Brexit abating. What about the 24 oil rigs that have been added over the past three weeks? How many producers are going to step up production with current prices? I don't know how producers operate but, you would think the DUC's would be completed before new wells were needed so, now that new wells are being drilled, is over production headed our way again? Probably.
Trader, I quit trading gold years ago since something would happen to the value of currency in Europe or Asia and gold would change direction and I'd never see it coming so, I got out and stayed out. At this time the price of gold appears as though it will swing in the opposite direction of U.S. interest rates. Who knows, there's been talk of an interest rate hike for several quarters now and those hikes keep getting delayed. It seems like gold would tank if an interest rate hike actually showed up or gold would tank on the rumor and be bought on the news just like many stocks trade.
These injection numbers that I post looking forward a few weeks aren't my calculations. I get those estimates from website "firstenercastfinical". Normally the analyst that makes these predictions is fairly accurate but, lately his predictions looking out past two weeks get changed when the actual date gets closer. Sometimes this analyst is right on the money and last week he predicted a 61 and actual was a 69. Nothing is perfect but, it is a guideline as to where injections are headed.