Discussion in 'Commodity Futures' started by Khaled187, Jun 29, 2007.
Its 20% less than it was this time last year. And hurricane season is crawling in.
Agree we are going to get a pop soon, but be careful comparing valuations YOY. Last year was artificially higher on Amaranth specs alone.
We are 2-3 BCF a day looser in the S/D balance, and are on track for new record storage carry into winter.
I agree about being careful with all the inventory, especially if we do not get a named storm in a few weeks. A heat wave will certainly help.
I started playing in Natty recently. I am usually involved in Crude. NG is a monster, where can I find the Daily ATR for Nat Gas?
In a nutshell: Gas Inventories Are Now 19% Above The Five Year Average, But Only 4% Below Year Ago Levels.
Storage through June 22, 2007: 2,443 Bcf (updated June 28, 2007).
Max storage for this week in history: 2,542 Bcf (2006). At present gas storage is at itâs 2nd highest level in history for this date.
We are now down only 4% (99 Bcf) relative to year ago storage levels. Due to the larger injection this past week relative to the year ago comparable week we cut the YoY deficit by another 1% (see chart below entitled âYear over Year Deficit Not So Slowly Ebbing Away). As you can see in the chart, the YoY deficit has fallen pretty sharply from its early March peak when it stood at a bulging 17%.
We are now 19% (382 Bcf) above the 5 year average which includes 2006âs record levels (see third chart below).
NG is a disaster and looks headed to $4's. Every inventory report for the last 10 weeks has shown a build of 10 BCF higher than year ago. At start of build season there was 220 BCF less in storage than year ago. Now it is just 90 BCF below. We are on pace to move above year ago by winter. Which sets up the doomsday scenario again of just being one warm winter away from potentially running out of available storage for next year.
Last Aug there was a big heat wave and injections into storage were very low. Comps will be tough next month. If no heat wave this year and no hurricane it makes sense for last year's low in the 4's to be matched as storage levels move above year ago. This could derail the entire energy trade because so many of the OIH stocks and publicly traded E&P stocks derive big chunk of earnings from N. American natural gas.
Hurricanes have a bullish effect due to the production shut-ins in the Gulf of Mexico. The Gulf provides roughly 20% of US domestic production.
Yesterday was a down day. Its seems like NG is trying to gather some steam now. Lets see what happens.
Im bearish on NG.