Natural Gas Forecast Jan. 12, 2012, Fundamental Analysis

Natural gas prices dropped on Wednesday, as forecasts showed milder weather across much of the U.S through late January, crimping demand for the furnace fuel.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will be likely lower than average over the coming period, and that could put natural gas between gains and losses in next period.

Natural Gas Forecast Jan. 11, 2012, Fundamental Analysis

as meteorologists predicts colder than normal weather in late January, and that may boost demand on natural gas in the next few days.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will likely be lower than average over the coming period, and that could put natural gas between gains and losses.

Natural Gas Forecast January 11th, 2012, Technical Analysis

Natural gas fell again for the session on Tuesday, and even managed to close well below the $3 mark. The close at $2.91 tells us that the next leg down is currently underway, and we are going to be joining it. There is absolutely no reason to buy at this point, and this closing below the $3 level shows that the support level has given way. Selling on rallies is also a perfectly acceptable strategy.

Natural Gas Forecast January 11th, 2012, Technical Analysis
Natural Gas Forecast January 11th, 2012, Technical Analysis

Natural Gas Forecast January 10th, 2012, Technical Analysis

Natural gas markets had a very quiet session on Monday as traders continue to grapple with the idea of sub-$3 trading. The level is acting as support, but the reality is that the trend is down, and the situation in natural gas inventories isn’t changing all that much. Because of this we feel the downtrend will continue, and that selling is the only way to trade this market.

We look at all bounces as opportunities to sell, and would also sell the daily close below the $3 mark. The market cannot be bought at all, as the supply of natural gas in the United States is far too strong for the demand to ever deplete in any credible manner.

Natural Gas Forecast January 10th, 2012, Technical Analysis
Natural Gas Forecast January 10th, 2012, Technical Analysis

Natural Gas Forecast Jan. 10, 2012, Fundamental Analysis

Natural Gas Forecast Jan. 10, 2012, Fundamental Analysis
Natural Gas Forecast Jan. 10, 2012, Fundamental Analysis
Natural gas prices dropped as meteorologists predicts that mild weather will widen the surplus of the heating fuel, and that may affect the demand on natural gas in the next few days.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will be likely lower than average over the coming period, and that could put natural gas between gains and losses.

Natural Gas Forecast for the Week of January 9th, 2012, Technical Analysis

Natural gas fell in the second half of the week to form a shooting star at the bottom of the recent downtrend. The market currently sits just above the $3 mark, and it looks like we are winding up breaking below it. The level is a natural one to offer support as it is a large psychological round number. The candle that formed for the week does suggest that a breakdown could be coming as the rally faded yet again. We are selling all rallies in this pair, and would be aggressively short if we can break below the lows form this shooting star.

Natural Gas Forecast for the Week of January 9th, 2012, Technical Analysis
Natural Gas Forecast for the Week of January 9th, 2012, Technical Analysis

Natural Gas Forecast January 9th, 2012, Technical Analysis

Natural gas rose during the Friday session as the $3 level continues to offer support in this long-beaten down market. The large psychological numbers always tend to attract value investors, and this time will be no different. However, the supply far outweighs the demand in this market at the moment, and should continue to do so for the foreseeable future. The rallies are to be sold going forward, and a break of the $3 level on a daily close would signal another round of selling as well. We cannot imagine a situation where we buy this contract at the moment.

Natural Gas Forecast January 9th, 2012, Technical Analysis
Natural Gas Forecast January 9th, 2012, Technical Analysis

Natural Gas Weekly Forecast January 9-13, 2012, Fundamental Analysis

Natural Gas Weekly Forecast January 9-13, 2012, Fundamental Analysis
Natural Gas Weekly Forecast January 9-13, 2012, Fundamental Analysis
Natural gas prices rose last week, as colder than expected weather conditions boosted speculations of rising demand for natural gas as a heating fuel. While the EIA report showed natural gas inventories decreased by 76 billion cubic feet, below estimates of a decrease by 78 billion cubic feet.

Traders will be focused on the weather forecasts, where cold weather conditions are expected to boost demand for natural gas, pushing prices higher accordingly, since demand for heating fuel would amplify as a result, but the fact that inventories are approaching a record high could still lead prices to show some volatility over the next week.

Highlights for this week that will probably affect the Natural Gas direction are:

Thursday December 12:

At 15:30 GMT, The EIA will release the weekly natural gas storage change for the week ending January 06, where the prior report showed that natural gas inventories decreased by 76 billion cubic feet.

Natural Gas Forecast Jan. 9, 2012, Fundamental Analysis

Natural Gas Forecast Jan. 9, 2012, Fundamental Analysis
Natural Gas Forecast Jan. 9, 2012, Fundamental Analysis
Natural gas prices inclined as meteorologists predicts that the U.S Northeast may get another blast of cold weather by mid-January, and that could boost the demand on natural gas in the next few days, noting that US dollar inclined heavily on Thursday.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will be likely lower than average over the coming period, and that could put natural gas between gains and losses.

Natural Gas Forecast January 6th, 2012, Technical Analysis

Natural gas markets fell again for the Thursday session as traders sold off the rally from Wednesday. The rallies have all been selling opportunities in this market, and the last 24 hours have only confirmed this yet again. The $3 level is just below, so seeing a bit of a bounce at this area wasn’t surprising. The market likes to focus on large round numbers like this, and as a result we are waiting to see a daily close that is below the area. The buying of this market isn’t advisable, and selling rallies is an alternative strategy going forward. Either way, we are selling sooner or later.

Natural Gas Forecast January 6th, 2012, Technical Analysis
Natural Gas Forecast January 6th, 2012, Technical Analysis

Natural Gas Forecast Jan. 6, 2012, Fundamental Analysis

Natural gas prices fell though meteorologists predicted colder weather than before next week, and that could boost the demand on natural gas in the next few days, noting that US dollar inclined heavily on Thursday.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will be likely lower than average over the coming period, and that could put natural gas between gains and losses.

Natural Gas Forecast January 5th, 2012, Technical Analysis

The natural gas markets bounced on Wednesday as the colder weather in the northeast section of the United States led speculators to think that the demand must be picking up. While this is almost certainly true, the inventory report today will more than likely show a drawdown of about 84 BCF, which is far below the historic norm. The winter has simply been too warm for most of this year to burn through the supply. Besides, there is far more natural gas than demand anyway, regardless of weather. The bounce looks strong, but the reality is that rallies are to be sold on weakness. We are looking for that weakness starting at the $3.20 level, and will sell the market on shorter time frames as candles show weakness.

Natural Gas Forecast January 5th, 2012, Technical Analysis
Natural Gas Forecast January 5th, 2012, Technical Analysis

Natural Gas Forecast Jan. 5, 2012, Fundamental Analysis

Natural Gas Forecast Jan. 5, 2012, Fundamental Analysis
Natural Gas Forecast Jan. 5, 2012, Fundamental Analysis
Natural gas prices inclined for the second day as meteorologists predicted weather will be colder next week, fueling speculations about a boost in demand on natural gas in the next few days.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will be likely lower than average over the coming period, and that could put natural gas between gains and losses.

Natural Gas Forecast January 4th, 2012, Technical Analysis

Natural gas markets tried to rally on Tuesday, but were sold off in the end to form another shooting star in this market. The candle shows up at the bottom of a long bearish move, and this spells trouble for the bulls. The supply in this market is so much that there simply isn’t a case for buying it under any circumstances. The breaking below the bottom of the trading range for the Tuesday shooting star forces us to sell again. However, we really do prefer to sell this market after a bounce – perhaps at the $3.50 or $3.25 levels.

Natural Gas Forecast January 4th, 2012, Technical Analysis
Natural Gas Forecast January 4th, 2012, Technical Analysis

As if the Arab Spring Doesn’t Have the Middle East Hot Enough, Now Iranians Threaten War over Oil

Today, Oil prices surged upward by over 4% pushed by the increased concerns over the Iranian threats to close to Strait of Hormuz. This narrow strip of water is a major shipping route for oil tankers. Closing of this waterway would not stop the flow of oil but would cause shipped to have to reroute tankers, using slower, longer shipping routes. This rerouting, is costly, and would also cause shortages in the supply of oil, until the shipping cycles could catch up.

Oil prices jumped 4.2% to close at $102.96 a barrel. This is the highest settlement price since May 10, when prices ended the day at $103.88 a barrel.

The oil producing nations of the Middle East, have assured the global markets that they would be able to make up any shortages if necessary. It is the time needed to handle the logistics and the lengthen route to ports that have the markets worried.

At the same time, the increased price of oil, during these delicate economic times could hamper growth and manufacturing.

This conflict, can also lead to higher tensions and possible military action.

Today, the Iranian Military challenged the US and have threatened to attach our naval vessels in the gulf or the straits.

Iran said it would take action if a U.S. aircraft carrier which left the area because of Iranian naval exercises returns to the Gulf. The state news agency IRNA quoted army chief Ataollah Salehi as saying that “Iran will not repeat its warning … the enemy’s carrier has been moved to the Sea of Oman because of our drill. I recommend and emphasize to the American carrier not to return to the Persian Gulf.”

The United States will continue to deploy its warships in the Gulf, a defense spokesman said on Tuesday after Iran threatened to take action if the U.S. Navy moves an aircraft carrier into the Gulf.

“These are regularly scheduled movements and in accordance with our long-standing commitments to the security and stability of the region and in support of ongoing operations,” Commander Bill Speaks said in an emailed response to Reuters questions.

“The U.S. Navy operates under international maritime conventions to maintain a constant state of high vigilance in order to ensure the continued, safe flow of maritime traffic in waterways critical to global commerce,” he said.

Speaking about Iranian threats, State Department spokeswoman Victoria Nuland said the U.S. saw “these threats from Tehran as just increasing evidence that the international pressure is beginning to bite. They are feeling increasingly isolated and they are trying to divert the attention of their own public from the difficulties inside Iran, including the economic difficulties as a result of sanctions.”

Natural Gas Forecast Jan. 4, 2012, Fundamental Analysis

Natural gas prices inclined as meteorologists predicted colder weather than before next week, and that could boost the demand on natural gas in the next few days.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will be likely lower than average over the coming period, and that could put natural gas between gains and losses.

Natural Gas Forecast January 3, 2012, Technical Analysis

Natural gas fell again during the session on Monday, but managed a slight bounce to form a hammer under the $3 mark. The market has been sold relentlessly over the last several months, and as a result isn’t able to be bought, even though it is starting to look more and more like a bounce could be coming. The bounce that should appear will more than likely only end up being another opportunity to sell this market as the long downtrend continues. The supply continues to outweigh any demands out there, and the $3.25 and $3.50 levels both look resistive and possible selling points on weakness.

Natural Gas Forecast January 3, 2012, Technical Analysis
Natural Gas Forecast January 3, 2012, Technical Analysis

Natural Gas Forecast for the Week of January 2, 2012, Technical Analysis

Natural Gas markets fell again for the week as the bearish mood continues. Supply is simply far too strong for demand to soak up all of the natural gas out there. The $3 level gave way on Friday, but only barely so. Because of this, it is becoming obvious that the market will continue to struggle with pricing power. The rallies are to be sold when they appear, and the new lows only suggest that a short can be placed there as well. We do however prefer to sell rallies as it allows us to work with the trend and it’s momentum for longer before exploring lower and new prices.

Natural Gas Forecast for the Week of January 2, 2012, Technical Analysis
Natural Gas Forecast for the Week of January 2, 2012, Technical Analysis

Natural Gas Forecast January 2, 2012, Technical Analysis

The natural gas markets fell on Friday as the traders continued to sell the overabundant resource off. The $3 level has given way a bit, but the fact that the market is sitting at $2.99 doesn’t exactly get us ready to short right way as it is still within a margin of error so to speak from $3. The market however, looks very bearish overall, so we know that selling it the only way to go going forward.

The supply for the natural gas markets is over 14 trillion cubic feet in the United States alone. Because of this, it is very difficult to imagine a situation where the market gets a sudden bid up. To put things into perspective, that amount of gas is enough to power the United States for well over 300 years, and this supply is only being added to as the Americans find more and more natural gas almost every day. The supply is seemingly endless, and because of this, the natural gas prices will have to keep falling. Adding to this downward pressure is the fact that the northeastern United States is having a warmer than usual winter, driving demand down.

We actually prefer selling the bounces, as the trend should continue going forward. The market is a bit oversold, and a few bottom feeders could find their way into the market at the $3 area, which would only serve our interests quite well. We see the $3.25 level as the first serious resistance area, and the $3.50 level is next. We are hoping to see a move up to one of those areas followed by a weak looking candle. Because of this, the rallies should only provide us more value on the sell side.

The year has been a particularly rough one for the market, and the downward pressure looks set to continue right out of the gate for 2012. However, there could be a small pop in the price as many money managers will allocate new trades at the start of the year. There are value investors that are willing to step into situations like this, and lower volumes in the beginning of the year could exaggerate any buying. Again though, we are waiting to sell from those levels.

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

Natural Gas Weekly Forecast January 2-6, 2012, Fundamental Analysis

Natural gas prices fell last week, as warmer than expected weather conditions boosted speculations of falling demand for natural gas as a heating fuel. While the EIA report showed natural gas inventories decreased by 81 billion cubic feet, above estimates of a decrease by 85 billion cubic feet.

Traders will be focused on the weather forecasts, as warm weather conditions are expected to weigh down on demand for natural gas, and that could push prices lower since demand for the heating fuel would decrease accordingly.

Highlights for this week that will probably affect the Natural Gas direction are:

Thursday January 5:

At 15:30 GMT, The EIA will release the weekly natural gas storage change for the week ending December 30, where the prior report showed that natural gas inventories decreased by 81 billion cubic feet.