• 4 minutes What will the future hold for nations dependent on high oil prices.
  • 7 minutes Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 12 minutes OPEC Cuts Deep to Save Cartel
  • 15 minutes Venezuela continues to sink in misery
  • 8 hours End of EV Subsidies?
  • 14 hours Citi cuts Apple's price target
  • 8 hours Maersk's COO statment.
  • 10 hours Japan Effectively Bans China’s Huawei, ZTE From Government Contracts, Joining U.S
  • 4 hours GOODBYE FOREIGN OIL DEPENDENCE!!
  • 11 hours Oil prices may go up, but will be below $70 a barrel in FY19: Hindustan Petroleum Chairman
  • 4 hours Asian stocks down
  • 12 hours USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico
  • 12 hours Regular Gas dropped to $2.21 per gallon today
  • 7 hours Trump accuses Google Of Hiding 'Fair Media' Coverage of him
  • 2 hours IT IS FINISHED. OPEC Victorious
  • 5 hours Price Decline in Chinese Solar Panels
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Is The Natural Gas Rally Over?

Tanks

August Natural Gas futures surged to the highest level since the week-ending October 16, 2015 earlier in the week, but sellers came in at $2.812 to stop the rally on concerns the market had advanced too far, too soon. Seasonal traders also came in to take advantage of the high prices based on historical data that shows the market has a tendency to reach a top at this time of year.

Traders did show some resilience, however, by rallying on Thursday, shrugging off bearish stockpile data as traders continued to focus on the weather and the possibility of strong summer demand.

According to Platts Analytics, the hotter weather has increased power demand. Consumption grew about 1.5 percent month-to-date to nearly 67 billion cubic feet a day, despite expectations the recent price surge would lead power plants to seek cheaper fuel.

Power generators continue to burn coal and natural gas to meet consumer needs during this unusually hot June. With weather forecasts calling for a hotter-than-average summer, many traders feel that this usage trend is likely to continue, helping to underpin prices. There is also a general optimism building in the market that a rebalancing is taking place, and this is also providing support.

Fundamental traders cite the high inventories as one reason why the current rally is unsustainable. Inventories as of June 17 reached 3.1 trillion cubic feet, 25 percent above levels from a year ago and 28 percent above the five-year average for…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions




Oilprice - The No. 1 Source for Oil & Energy News
-->