Natural Gas Fundamental Analysis March 12, 2012, Forecast

Analysis and Recommendations:

Natural Gas  moved back up today, after falling all week to close yesterday at 2.295 and is currently holding at 2.308. There is a strong line of support at the 2.30 level and again at the 2.323 level. Natural Gas will most likely sit in this range for a while. Winter is over and there is little demand and inventories remain high.

 

 

 

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Natural Gas Forecast March 9, 2012, Technical Analysis

 

Natural gas markets fell most of the day on Thursday, but got a small bounce in the end to form a hammer. The candle suggests that perhaps we are getting ready to see a bounce in this market, but we simply cannot look at this as a buy signal. Instead, we see it as a warning that we need to be paying attention to the market for signs of weakness after a bounce. After all, we simply cannot buy a market that is so unequivocally broken down.

The $2 level is still calling us, and we think that if we get the bounce from here, we are likely to see resistance at the gap from the weekend, and also from the $2.60 level. Both of those would make great places to see weak daily candles in order for us to sell. The breaking below of the hammer is also a strong sell signal, and one we wouldn’t hesitate to take as well. The breakdown would show renewed bearishness by the market, and almost certainly have to open the door to our $2 target at that point.

However, we actually prefer to see a bounce as it will give us a higher level from which to sell. The conviction in which the sellers have been showing is simply far too strong to consider looking at the market in any other way. While it is true that the market will eventually turn around someday, that day is far from now if you understand exactly how much natural gas is ready in the marketplace at the moment.

The United State has over 14 trillion cubic feet of it, and Canada has something along the lines of another 7 trillion, making the “need” for natural gas rather small in comparison. This massively imbalance would continue going forward, and as a result we think this trend still has quite a bit of legs to it still. Selling rallies and new lows has served us well for months, and we suspect it will for the foreseeable future also.

Natural Gas Forecast March 9, 2012, Technical Analysis
Natural Gas Forecast March 9, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 9, 2012, Forecast

Analysis and Recommendations:

Natural Gas dropped to 10-year lows after a supplies report showed a lower-than-expected weekly decline. Natural gas dropped over 4 cents, or 2.0%, to $2.256. It had traded around $2.41 before the report. The Energy Information Administration reported a decline of 80 billion cubic feet for the week ended March 2. Analysts polled by Platts had expected declines between 82 bcf and 86 bcf for the week.  Natural Gas has been falling steadily looking for a bottom as winter comes to an end.

The U.S. Energy Information Administration’s weekly report showed that natural gas storage in the U.S. in the week ended March 2 fell by 80 billion cubic feet, after declining by 82 billion cubic feet in the preceding week. Analysts had expected U.S. natural gas storage to drop by 86 billion cubic feet. 

Inventories fell by 63 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 92 billion cubic feet, according to U.S. Energy Department data.

Total U.S. natural gas storage stood at 2.433 trillion cubic feet as of last week. Stocks were 739 billion cubic feet higher than last year at this time and 792 billion cubic feet above the five-year average of 1.641 trillion cubic feet for this time of year. (from the EIA statement )

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Natural Gas Forecast March 8, 2012, Technical Analysis

Natural gas markets continued to look very weak during the Wednesday session as the market fell yet again. The recent breakdown of the massive symmetrical triangle was “60 cents tall”, and as such gives us an implied target of $2 in this market. There is absolutely nothing on this chart that suggests otherwise, and to be honest – $2 will more than likely only be a pause in this decline. The $1 mark is one a lot of analysts are calling for now, and we tend to believe them. We sell rallies on signs of weakness, and never, ever buy this contract.

Natural Gas Forecast March 8, 2012, Technical Analysis
Natural Gas Forecast March 8, 2012, Technical Analysis

 

Natural Gas Fundamental Analysis March 8, 2012, Forecast

Analysis and Recommendations:

Natural Gas continues to fall trading at 2.306 down from 2.348. Weather forecasts continue to call for a warmer March then predicted and with just a few more days left of winter the demand for Gas is gone for the season. Inventories continue to remain high. Gas should sit in this range for quite a long while, regardless of production cuts, as consumption is quite low.

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Natural Gas Forecast March 7, 2012, Technical Analysis

The natural gas markets had a fairly quiet session on Tuesday as the market continues to consolidate in this area. It should be known that there were reports of increased demand, and fewer drillers operating in the future, but even this wouldn’t push prices up for any real length of time. In fact, the action was bullish at first, but faded away towards the end of the session. The market looks like it will continue lower, and as such we are selling this market on any type of rally or when it breaks lower. Buying cannot be done under any circumstances.

Natural Gas Forecast March 7, 2012, Technical Analysis
Natural Gas Forecast March 7, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 7, 2012, Forecast

Analysis and Recommendations:

Natural Gas is trading at 2.349, opening at 2.352, market talk pushed NG up a bit in mid day trading and buyers were trying to pick up a bargain, with prices plunging so quickly. Natural gas prices lost 5.2% on Monday to settle at USD2.348. But prices regained modest strength as traders covered short positions only to fall again later in the day. With 16 days left of winter, warmer than average weather and over stocks in inventory, Gas will continue to fall to the earlier low of 2.32 and sit tight.

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Natural Gas Forecast March 6, 2012, Technical Analysis

The natural gas markets have been overly bearish for the last year or so, and the trend looks as if it is picking back up again. The supply in the gas markets is far too large for the demand to take it all in, and as such there is little hope of the market rising for any significant amount of time. The increasing concerns over Middle Eastern troubles also has started to kick in the conversation in America about utilizing more of the country’s massive 14 trillion cubic feet of natural gas reserves as it is so abundant, cheap, and much more secure than oil supply from places like the Persian Gulf.

Recently, we saw a bit of an attempt to rally this market, and formed a symmetrical triangle. The triangle broke a week ago, and now we use the height of that triangle to project the move down. Based upon that triangle, we are expecting to see natural gas hit the $2 mark before too long, and it is through this prism that we look at the markets for our trades.

The gap down for the session on Monday is a massive signal to sell yet again, even though the market is massively oversold at this point. Of course, in the more near-term, we see the recent consolidation as the rest before the continued fall, and this gap certainly does nothing to dissuade us from selling more. In fact, we will continue to add to the short position until we get to the $2 mark.

The rallies going forward will only add to our positions as it allows us to sell more at a higher price. The market can’t be bought as there is simply far too much in the way of bad news for the natural gas markets to rise over time, as the new technologies allow gas drilling in places that previously weren’t possible. With this in mind, we are selling any and all rallies and new lows. The gap from the start of Monday should now be resistance as well, as this trend continues.

Natural Gas Forecast March 6, 2012, Technical Analysis
Natural Gas Forecast March 6, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 6, 2012, Forecast

Analysis and Recommendations:

Natural Gas  has dropped to 2.357 falling almost .05 today. Natural Gas, bottomed, falling as low as 2.352 opening at 2.401. NG has dropped from the high of 2.807 just two weeks ago. Natural Gas is right back where it started on February 1, 2012, when the markets started to inflate.

It is very rare that the FXEmpire team hits a home run, we usually make it to first base, often hit a groundball double, sometime a solid 3 bagger, but an out of the park homerun is unusual. Our overall goal is to provide our readers with accurate information and forecasts, without predicting the markets. The FXEmpire team analyzes data and fundamental information, so that our readers, that do trade have valuable non biased information. Over the past few weeks we have continued to review our analysis and have predicted that Natural Gas will plummet seeking a bottom in the 2.36 range. Since February 29th, we have been forewarning our readers that this drop was coming, We have been continuously informed our visitors that there were no real reasons to support the upswing in Natural Gas and as it climbed near the 2.80 level, our team published an article saying that this was crazy. So every now and then, it is nice to be able to brag and say we called this one right.

 

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The FxEmpire Team Hits A Home Run on Natural Gas

It is very rare that the FxEmpire team hits a home run, we usually make it to first base, often hit a groundball double, sometime a solid 3 bagger, but an out of the park homerun is unusual. Our overall goal is to provide our readers with accurate information and forecasts, without predicting the markets.

The FxEmpire team analyzes data and fundamental information, so that our readers, that do trade have valuable unbiased information. Over the past few weeks we have continued to review our analysis and have predicted that Natural Gas will plummet seeking a bottom in the 2.36 range. Since February 21th, we have been forewarning our readers that this drop was coming, We have been continuously informing our visitors that there were no real reasons to support the upswing in Natural Gas and as it climbed near the 2.80 level, our team published an article saying that this was crazy. So every now and then, it is nice to be able to brag and say we called this one right.

Today, Natural Gas, bottomed, falling to 2.365 opening at 2.401. NG has dropped from the high of 2.807 just two weeks ago. Natural Gas is right back where it started on February 1, 2012, when the markets started to inflate.

Natural Gas Monthly Fundamental Forecast March 2012

This over production, without new uses or demands has increased inventories and pushed Natural Gas prices below estimates and projections. Natural Gas hit a bottom in February of 2.32 but moved back up to 2.80 on unimportant news and predictions of cold weather, and then begin to fall back down to find a bottom. NG as is trading around 2.47 at present and will most likely fall to the 2.42 number in March and then drop again when winter is officially over.

Natural Gas Weekly Fundamental Analysis March 5-9, 2012, Forecast

Natural Gas  is down for the week at 2.466. Natural Gas continues to fall, with excess inventory and fewer days of winter. NG should slowly continue to fall throughout the week, possibly find a near bottom at 2.40

Natural Gas Fundamental Analysis March 5, 2012, Forecast

Natural Gas stayed in a tight trading range today, closing the day just about where it began. NG is trading currently at 2.482 having opened at 2.481. NG will continue to stay range bound until investors give up and move from their positions, as the winter days move past us, investors are hoping for one last blast of cold to push the prices back up or a news story that will give one last surge before Gas creeps to a bottom and sits there for months to come.

Natural Gas Fundamental Analysis March 2, 2012, Forecast

Natural Gas continues to fall. With excess inventory and winter almost over NG is looking for a place to sit for the next few months. Gas is trading at 2.478 falling from 2.587. Just a few weeks ago gas was hitting a low at 2.32, and is probably where it is headed to now.

Natural Gas Fundamental Analysis March 1, 2012, Forecast

Natural Gas should continue to slowly sink until it finds a bottom.

Natural Gas Weekly Fundamental Analysis February 27 – March 2, 2012, Forecast

Natural Gas ended the week at 2.686 after hitting a high earlier in the week of 2.825. NG has been in the news a good deal lately, with announcements from Chesapeake Energy with their future growth predictions along with news of more use of natural gas in the future and environmentalist concerns in regards to the process used to capture the gas. Inventories this week showed a drop as expected. Weather has been holding and winter is coming to an end along with the possible higher demand for NG. Natural Gas should bottom out over the next month.

Natural Gas Fundamental Analysis February 22, 2012, Forecast

Natural Gas is trading at 2.775 in today’s session as investors pulled profits after NG surged close to 20% in less then two weeks. Earlier in the day Natural Gas hit a high of 2.79, last week NG topped out at 2.81 after moving up from 2.36 earlier this month. Winter days are running short and warm weather is predicted. Gas was seeking a bottom when inventory reports last week showed it below forecast, non the less there is still no reason for NG to continue to climb.

 

Natural Gas Forecast March 5, 2012, Technical Analysis

Natural gas markets rose ever so slightly during the Friday session, yet failed to impress on any level whatsoever. The price action for the session was more indicative of a benign trading session with no real catalyst to push the market than any kind of statement. 

We saw the market break down and out of a triangle a few days ago, and quite frankly would love to see a bounce here so that we can sell more contracts. In the meantime, nothing has changed: We sell bounces and new lows. Buying isn’t even a thought at this point in time as we are aiming for a $2 print before the move is over. 

Natural Gas Forecast March 5, 2012, Technical Analysis
Natural Gas Forecast March 5, 2012, Technical Analysis

Natural Gas Forecast for the Week of March 5, 2012, Technical Analysis

The natural gas markets fell for the week as the downtrend looks set to continue going forward. While the triangle that was broken doesn’t look like much on a weekly chart, it was significant on the daily one and measures for a move down to the next handle, the $2 mark. This is a very logical and reasonable move, and considering it is with the trend – we are inclined to believe the signal.

The oversupply of natural gas is a structural issue, and there is absolutely no end in sight to it. The United State alone is known to have at least 14 trillion cubic feet of natural gas waiting to be drilled, and the storage facilities in the US are absolutely overflowing with the commodity. Canada is known to have about 10 trillion known cubic feet available as well. No matter how you slice it, the market is going to have more than enough supply coming as long as there are people willing to buy it.

In order for the market to turn around, we have so see less drilling. This is starting to happen, but we are a long way away from seeing enough of the participants leave the drilling process in order to have prices rise. There will more than likely have to be a lot of consolidation in the companies that explore and drill for natural gas, and this could take time. It is in this environment that we find ourselves selling this market over and over.

The breakdown from the triangle sent the market down to the $2.40 area, and testing the lows in the area. The breaking of this level to the downside is a very bearish signal and has us selling more natural gas as we look for that above mentioned move to $2. The buying of this contract is absolutely ill advised, and we think that perhaps even the $2 level will merely be a bump along the road. There are many analysts out there calling for $1 prices in the next year or two, and judging by the way this market has behaved, that isn’t a real stretch of the imagination.

Natural Gas Forecast for the Week of March 5, 2012, Technical Analysis
Natural Gas Forecast for the Week of March 5, 2012, Technical Analysis

Natural Gas Weekly Fundamental Analysis March 5-9, 2012, Forecast

Rule: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the winter. Natural Gas is growing much faster than either of its non-renewable fossil fuel competitors, oil and coal.

Do not miss the weekly U.S. gas inventories report. The figures are issued by the Energy Information Administration (EIA) every Thursday afternoon at 15:30 (released Friday at 15:30 if there was a U.S. bank holiday on Monday). Here’s a link to the latest EIA report. The main natural gas moving figure in there is the change in inventories from the previous week. When it comes to the gas inventories report, we’re talking about billions of cubic feet, Bcf for short.

When the actual change in inventories number is released, it is the deviation from the expected number that is really important. If the actual inventories figure shows a 24 Bcf rise when an 84 Bcf increase was expected, then that is actually positive for the price of natural gas. All else equal, the price of natural gas should rise after the release.

A barrel of oil has roughly 6 times the energy content of natural gas. If the fuels were perfect substitutes, oil prices would tend to be about 6 times natural gas prices. However, due to various market characteristics discussed briefly above and the ease of using oil, the price of oil has been following a pattern of 8-12 times that of natural gas. However that ratio has spiked dramatically since March 2009.

 Analysis and Recommendation:

Natural Gas  is down for the week at 2.466. Natural Gas continues to fall, with excess inventory and fewer days of winter. NG should slowly continue to fall throughout the week, possibly find a near bottom at 2.40

Inventories this week eased slightly last week to 2,513 billion cubic feet (Bcf) as of Friday, February 24, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). The implied net withdrawal for the week was 82 Bcf, positioning storage volumes 756 Bcf above year-ago levels.

April natural-gas futures which dipped 5.9% on Thursday following a bearish inventories report bucked the trend, gaining 2 cents, or 0.9%, to settle at $2.48 per million British thermal units.

On the week, natural gas lost 7.8%. That was natural gas’s worst week since early February

Only Good News from the US:

Existing home sales US existing home sales picked up unexpectedly in January, but the previous figures were downwardly revised. 

Initial jobless claims US initial jobless claims stayed unchanged in the week ending February the 18th, while the consensus was looking for an increase.

University of Michigan consumer confidence The final figure of Michigan consumer confidence for February showed a strong upward, revision from 72.5 to 75.3, while only a minor one was expected.

New home sales After increasing for four consecutive months, US new home sales dropped at the start of 2012. 

Federal Reserve Chairman Bernanke testified before the Senate, this week, the markets found his comments a bit dovish and drew conclusions that any additional QA was off the table for the time being. Although the Chairman warned that the economy was recovering, he stated it was fragile and he was still worried about jobs. Gold soared on his comments.

 

Historical:

High      5.13 January 2011

Low       2.29 January 20, 2011

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Natural Gas Monthly Fundamental Forecast March 2012

Outlook and Recommendation

The U.S. Energy Information Administration estimates that U.S. natural gas pipeline companies added about 2,400 miles of new pipe to the grid as part of over 25 projects in 2011. New pipeline projects entered service in parts of the U.S. natural gas grid that can be congested: California, Florida, and parts of the Northeast Only a portion of this capacity serves incremental natural gas use; most of these projects facilitate better linkages across the existing natural gas grid.

By convention, the industry expresses annual capacity additions as the sum of the capacities of all the projects completed in that year. By this measure, the industry added 13.7 billion cubic feet per day (Bcf/d) of new capacity to the grid in 2011. The six largest projects put into service in 2011 added 1,553 miles and about 8.2 Bcf/d of new capacity to the system. Much of this new capacity is for transporting natural gas between states rather than within states. Golden Pass, Ruby Pipeline, FGT Phase VIII, Pascagoula Expansion, and Bison Pipeline projects added 6.1 Bcf/d, or about 80%, of new state-to-state capacity.

Natural gas pipeline capacity additions in 2011 were well above the 10 Bcf/d levels typical from 2001-2006, roughly the same as additions in 2007 and 2010, but significantly below additions in 2008 and 2009 (see chart below). Capacity added in 2008 and 2009 reflected a mix of intrastate and interstate natural gas pipeline expansions, related mostly to shale production, liquefied natural gas (LNG) terminals, and storage facilities.

This over production, without new uses or demands has increased inventories and pushed Natural Gas prices below estimates and projections. Natural Gas hit a bottom in February of 2.32 but moved back up to 2.80 on unimportant news and predictions of cold weather, and then begin to fall back down to find a bottom. NG as is trading around 2.47 at present and will most likely fall to the 2.42 number in March and then drop again when winter is officially over.

Natural Gas Inventory (EIA)

Summary from the EIA report

Average daily power prices in the Northeast and Midwest from the beginning of November 2011 through the first week of February have been unusually low. The driving factor is warm weather. Warm winter weather decreases the demand for electricity, which puts downward pressure on prices. The warm weather also cuts demand for natural gas, both as a heating fuel and as a fuel for power generation. This acts to hold down natural gas spot prices, which in turn decreases the cost of generating power.

Northeastern and Midwestern wholesale power prices typically are linked closely to natural gas prices, since natural gas-fired generators are often the marginal provider of power, and the marginal generator sets the power price in those markets. This connection is illustrated by the close tracking of the natural gas price (red line) and power price (blue line) in the chart above. This winter, warm weather and robust natural gas supplies moderated natural gas prices.

Cold weather around January 4 and January 16 contributed to higher spot natural gas and power prices in hubs in New York and New England. While the average January temperature at the LaGuardia Airport in New York City was 37°F, on January 4, the average daily temperature dipped to 19°F, and the average daily temperature was under 25°F on January 15 and 16.

During colder weather, demand for natural gas as a heating fuel increases, raising the spot market prices for natural gas, and therefore, for power as well. Northeastern price spikes are typically caused by natural gas pipeline capacity constraints on the natural gas grid serving this region and may not show up in other regions (see prices at Mid-Atlantic and Midwestern hubs below).

  • The return of warmer-than normal temperatures was likely the catalyst that caused natural gas prices to resume their multi-week downtrend. The Henry Hub price closed at $2.44 per million British thermal units (MMBtu) on February 29, down 16 cents for the week.
  • At the New York Mercantile Exchange (NYMEX), the April 2012 natural gas contract fell 15.9 cents per MMBtu for the week to close at $2.616 per MMBtu.
  • Working natural gas in storage eased slightly last week to 2,513 billion cubic feet (Bcf) as of Friday, February 24, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). The implied net withdrawal for the week was 82 Bcf, positioning storage volumes 756 Bcf above year-ago levels.
  • The natural gas rotary rig count, as reported February 24 by Baker Hughes Incorporated, decreased by 6 to 710 active units. Meanwhile, oil-directed rigs dropped by 7 to 1,265 units.

 

Historic Chart

 

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Natural Gas Fundamental Analysis March 5, 2012, Forecast

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Analysis and Recommendations:

Natural Gas stayed in a tight trading range today, closing the day just about where it began. NG is trading currently at 2.482 having opened at 2.481. NG will continue to stay range bound until investors give up and move from their positions, as the winter days move past us, investors are hoping for one last blast of cold to push the prices back up or a news story that will give one last surge before Gas creeps to a bottom and sits there for months to come.


Natural Gas Forecast March 2, 2012, Technical Analysis

Natural gas markets continued weakness on Thursday as the markets continue the downtrend. The triangle that had us selling is still broken, and still suggests that we are going to the $2 handle sooner or later. So now this position starts to look like one that we can have a core position short, while adding and subtracting as time goes on and price dictates. We cannot buy this contract at this time, and wouldn’t even consider it until we clear at the very least $3, and more than likely $4. We will add to our sell positions on rallies and new lows going forward until we hit $2, where we would expect some kind of reaction to the “round number”.

Natural Gas Forecast March 2, 2012, Technical Analysis
Natural Gas Forecast March 2, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 2, 2012, Forecast

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Analysis and Recommendations:

Natural Gas continues to fall. With excess inventory and winter almost over NG is looking for a place to sit for the next few months. Gas is trading at 2.478 falling from 2.587. Just a few weeks ago gas was hitting a low at 2.32, and is probably where it is headed to now.

The Energy Information Administration reported a decline in natural gas supplies by 82 billion cubic feet in the week ended Feb. 24. Analysts polled by Platts had expected a decrease between 90 bcf and 94 bcf for the week

The weather this weekend calls for light snow, but no cold fronts moving in and mostly rainy for the next week or two.

March 2012
1st-3rd. Light snow/flurries. Steadier, heavier snows along New England coast.
4th-7th. Stormy, with significant snow accumulations possible Mid-Atlantic region, then clearing.
8th-11th. Fair.
12th-15th. Light rain, especially Pennsylvania, New York, then fair.
16th-19th. Showers, heavy thunderstorms. Break out green umbrellas for St. Patrick’s Day Parade in N.Y.C.

 

 


Natural Gas Forecast March 1, 2012, Technical Analysis

Natural Gas markets rose slightly during the Wednesday session as the downtrend took a slight pause. The breaking lower of a recent triangle still has us very bearish in this market, and the trend is certainly with this sentiment. Because of this, we are sellers of this contract, and are willing to sell the rallies as well. The $3 level above should continue to keep the market lower, and we think that based upon the measurement of the triangle we just short that the market will eventually get down to the $2 mark. We are sellers on rallies, and new lows. 

Natural Gas Forecast March 1, 2012, Technical Analysis
Natural Gas Forecast March 1, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 1, 2012, Forecast

Economic Events: (GMT)

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Analysis and Recommendations:

Natural Gas  is holding at 2.6006 up from this morning’s opening of 2.537. Today about 18,300 megawatts, or 18 percent, of the nation’s nuclear capacity was offline on Wednesday, up from about 10,000 MW out at this time last year and a five-year average outage rate of about 11,500 MW for this week.               

With extended forecasts still not showing any extreme cold on the horizon and winter winding down, traders said the huge surplus could pressure prices in late March if contractual obligations force utilities to cycle gas out of inventory to meet seasonal turnover requirements. Early withdrawal estimates for this week’s EIA report range from 82 bcf to 105 bcf, with most in the 90 bcf area versus last year’s drop of 85 bcf and the five-year average decline for that week of 118 bcf.

Many traders remain skeptical of announced production cuts, noting the planned reductions so far were   not enough to tighten a market oversupplied by as much as 3 bcf per day, or more than 4 percent.

Natural Gas should continue to slowly sink until it finds a bottom.

 

Natural Gas Forecast February 29, 2012, Technical Analysis

The natural gas markets fell again on Tuesday as the triangle that broke signals another run to the downside going forward. There are many reasons for the market to fall, not the least of which includes a simply glut of supply. The United States is sitting on roughly 14 trillion cubic feet of natural gas, and that doesn’t even include the massive amount in Canada as well. The oil drillers in the Gulf of Mexico will often burn off the natural gas byproduct that appears when they drill as it simply isn’t worth bothering with. In other words, natural gas isn’t exactly in demand, and demand rules everything in the end.

The new technologies that have come about in the last few years have simply flooded the market with cheap gas, and this should continue to be the case as technology will only increase the amount of gas that is recoverable over time. With this in mind, it could be a long time before the natural gas markets pick up.

The triangle that broke down on Monday was further confirmed on Tuesday as the price continued to fall, and now threatens the $2.50 level. The market is obviously one that you cannot buy at this point, and in fact is one you should always be asking “When can I sell it again?” The triangle that gave way measured a move down to the $2 level, and this is natural as the market likes to move from one big figure to another. The downward momentum should continue into the future and a move down to the level wouldn’t exactly be a surprise.

The market can be sold here quite frankly, as long as you are willing to set stop losses above the $2.80 level. The contract is one that has been very good to us, as we have sold rally after rally. While there is only one way to trade, there is always someone willing to buy. This should ensure sellable rallies in the future as well. Sell, sell, and sell some more.

Natural Gas Forecast February 29, 2012, Technical Analysis
Natural Gas Forecast February 29, 2012, Technical Analysis