melt, I always enjoy this type of data, since the data says NG will range between $2.49 and $3.62. Now that NG is at $3.05, I guess it's safe to say there's a good chance NG will either go up or down 50 cents. Am I the only one that sees these so called professional forecast as a huge joke. Nothing against you melt, it's these so called professional analyst that give themselves quite a range to be correct in. All of us can give a prediction like that.
Keep in mind, the data I just shared it just someone's guess which usually isn't any better than our own. Other people's guesses often lead to poor decision making. Last fall, I think it was Gartman but, not positive, claimed that NG under $4 is a buy because winter is coming and NG will hit $5 to $5.50. Does anyone see that happening now? It would take a very cold February and March for anything like that to happen. The next big guess will be catching oil at the bottom. There are plenty of guesses out there, they range from oil at the bottom as we speak to oil not bottoming out until 2016. Any of us can guess in that range also. We never know what can happen but, no new oil demand and nobody blinking on cutting production points in the direction of lower oil prices unless, oil fields are set on fire. Oil rising today due to tanker fires in Libya but, they only handle about 1.5% of OPEC's daily output. That doesn't seem like a reason for a true turn around.
WTI Crude Oil Price Forecast
WTI Crude Oil Price Forecast Values
West Texas Intermediate. USD/bbl. Average of Month.
Month Date Forecast
Correct +/- 80%
0 Nov 2014 75.79 +/-0.0 +/-0.0
1 Dec 2014 61.0 +/-1.9 +/-3.6
2 Jan 2015 53.6 +/-2.5 +/-4.8
3 Feb 2015 49.7 +/-2.9 +/-5.6
4 Mar 2015 50.0 +/-3.3 +/-6.3
5 Apr 2015 55.1 +/-3.6 +/-6.9
6 May 2015 64.9 +/-3.9 +/-7.4
Updated Monday, December 15, 2014
virt,someone correct me if I'm wrong. Last February when NG closed over $6, that was for March contracts and in less than ten days, NG was back down to $4.50. I don't think producers can lock in prices over $6 for months going forward since April NG contract prices were back at the $4.50 range. Who would be willing to pay over $6 for NG when winter was coming to an end except for the current month when they needed the NG? Always willing to learn.
mrscience, I'm trying to figure out how much NG it will take to replace the retiring coal generating plants that were generating 16 GW.
berto, two things I'm fairly sure of: If NG does get run up to $4 this winter, it'll be easy to short, if NG runs down to $2, enough rigs will come offline that it'll be easy to go long. I guess $3 is playing in the middle of the road at this time.
BNP Paribas lowered its estimate for average 2015 gas prices to $3.60 per million Btu from $3.75.
This sentence come from a Bloomberg article. If NG is going to average $3.60 in 2015, that must mean NG is going over $4 in 2015 to make up for the $3 level we're going to enter 2015 in.
Here are some facts that I have found: Using coal, it takes 500 tonnes of coal per hour to generate 1 GW of electricity per hour.
Using NG: It takes 1000 cubic feet per hour to produce 1KWH. There are 1,000,000 KW in a GW.
I'm doing something wrong with the math, my answers don't make sense. Anyone??
pass, I agree, NG production will most likely be cut with these low prices especially for producers that aren't hedged higher. And then if we happen to get a hot summer with LNG exports starting in Q4, throw in the possibility of the pipeline to Mexico that isn't getting finished for some reason that was suppose to handle up to 3 BCF a day being put online, of course NG could easily take off going forward. Now that NG is down 54% from last winter's high, I guess it's a fair call to say NG will go higher from this point in 2015 even if NG does go lower from here over the next couple of weeks. GL
pull, I'll admit I don't know what the price of oil will be this summer, how do you know that oil will be $80 this summer?
blue, I agree. It's like some so called pro's calling a bottom to oil now, no new demand, nobody slowing production, unless oil wells get set on fire, I think oil goes lower. I read an article where oil refineries are going to start limiting intake, that'll hurt the price of oil. Are we going to see tankers sitting offshore with no place to unload or sitting overseas with no place to go? Time will tell.
WTI has been hanging around the $55 mark for a few weeks now. Next, we have to ask ourselves, is the next movement more likely to be up or down. No new demand, nobody slowing production, common sense doesn't always work but, it looks like a leg down is more likely than a leg up in price. Forbes is claiming that oil won't bottom until 2017, that's just their guess, I'll probably be long oil before the next OPEC meeting in June. I'm often wrong. GL
Go to youtube and watch oil baron Peter Schiff in his oil interview dated 8/27/13, he had oil going to $200. If an investor would have followed him, where would that investor be today. Forbes is currently calling for oil to bottom out in 2017 and hit $100 by 2020. If oil bottoms out in six months and if an investor follows Forbes then he/she could easily miss out on the upswing. Point being: Nobody knows for sure what any commodity is going to do next, that's why there's always buyers and sellers at every price. I'm on the wrong side of the current NG trade, I made the same mistake that many made, I trader on predicted weather by so called professionals vs. trading actual weather. The November NG run to $4.50 did enable producers to lock in prices for winter so, these lower prices won't mean much to producers that hedged a high percentage of their product. Of course, there's no way that I know what any producer did and maybe they're kicking themselves at this time for not hedging over $4 in November while looking at $3 now. I've read articles in the past where Canadian producers had locked in prices at $3.30 and then the price of NG increased over $4. So there you have it, even the NG producers don't know what's going to happen to the price of NG going forward when they sell at the wrong times also. Every trade we make could always have been better and always could have been worst. GL
blue, Merry X-Mas. I've been buying with stop losses in place for the last month. My last sale was UGAZ at $6.10. I haven't repurchase at this time. One of these days I'm bound to buy near the bottom and do some good on the way back up. I'm also open minded to the fact that NG was hedged high enough with November's NG=$4.50 that NG could continue down. I read an article yesterday that stated some floor traders are looking at buying March $5 calls. That sounds like a waste of money but, NG does some crazy things. If oil/NG rigs will be coming offline, I guess anything is possible.
really was a set up for this winter. On November 20, 2014 NG had shot up 95 cents from October 27, 2014. That's quite a three week rally. At that time producers were able to hedge out future month contracts so, they're receiving healthy pay checks today while NG is heading below $3. Any thoughts on this topic anyone?