• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 19 hours IMO 2020 could create fierce competition for scarce water resources
  • 6 mins Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 1 day IMO2020 To scrub or not to scrub
  • 4 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 42 mins Total nonsense in climate debate
  • 5 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 9 hours Theresa May to Step Down
  • 1 day Devastating Sanctions: Iran and Venezuela hurting
  • 1 hour Will Canada drop Liberals, vote in Conservatives?
  • 1 hour Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 1 hour Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 1 day Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 1 day Level-Headed Analysis of the Future of U.S. Shale Oil Industry
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Natural Gas Still Has Space To Fall

January Natural Gas

January Natural Gas futures declined to a multi-year low at $2.229 earlier in the week, but selling dried up, triggering a short-covering rally and enough upside momentum to put the market up for the week. If it can finish the week over $2.291 then a technical closing price reversal bottom will form. This will be the first sign that the buying is greater than the selling at current price levels.

(Click to enlarge)

This could prove to be difficult because the fundamentals remain bearish. Production remains strong and the commodity’s demand continues to fail to keep pace with the supply surge. Stockpiles held in underground storage in the lower 48 states reached 4 trillion cubic feet (Tcf) for the first time ever. The current storage level is up 11.2% from last year and is 5.5% above the five-year average, according to the latest data from the U.S. Energy Information Administration.

At this time of the year, weather should have the biggest influence on prices. However, so far, winter has been slow to arrive. Sure, snow blanketed much of the Midwestern and Great Lakes states over the week-end, but this wasn’t followed up by a lingering cold spell which would’ve led to increased demand.

Instead of the weather influencing the price action this week, the mechanics of the futures market seem to be exerting the biggest influence. With the December futures contract set to expire, short-sellers have been scrambling to cover their positions before expiration. This is creating an artificial bottom, but nonetheless, could prove to be an important technical formation especially since the market is technically oversold.

According to current data from the Commodity Futures Trading Commission, the number of bearish traders outnumber bullish traders by about 2 to 1. So even though supply continues to build, there is the possibility of a short-term bottom simply because investors may not want to add to current positions at this week’s current low price levels.

Technically, the main trend is down according to the weekly chart, however, a close over $2.291 on November 27 will create a potentially bullish closing price reversal bottom. Although this chart pattern may form this week, it will not mean much unless there is a follow-through rally next week.

The trend is not likely to turn up even if the chart pattern is confirmed. However, it could lead to the start of a 2 to 3 week…




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