Tuesday, March 19, 2013

Natural Gas Pops, Now Pennies Below $4.00 Ceiling

Currently $3.97.
As I said last Thursday:
Natural Gas: EIA Reports Much Larger Than Expected Withdrawal, Futures Pop
The front futures traded as high as $3.81, $3.7670 last. We had been hearing a range as low as 80 to 120 Bcf, today's 145 Bcf pull blows those numbers out of the water.
There are reports of producers laying on (and willing to lay on more) hedges at $4.00 or so which would make any move above that level very tough. On the other hand there has been a subtle but very important change in the supply picture over the last couple months, more on that later....
Here's today's action:
 

$4.00 is going to be tough to clear but there is a lot of consumption and a very slowly declining production picture.