Nat Gas Glut.

Discussion in 'Commodity Futures' started by Uncle_Ho, Oct 20, 2009.

  1. Whatever happened to that massive supply of natural gas one month ago. Nov nat gas has been skyrocketting lately, anyone know why?. How does the price more than double in 2 months, obviously contango has a little to do with this, but isn't that a little much?
  2. auspiv


    I'm curious about this as well.

    Take today for example: NG 11-09 is +0.099 and NG 12-09 is -0.025. The next few months out are also down.

    Is this an expiration issue? What happened to natural gas supply/demand for this month's delievery?
  3. We wound up avoiding the glut at the last minute through a combination of several things. We do have a very large amount of supply (a new record each week still). The market was then basically caught very complacently short and has had some strong price gains more on technicals and dynamics than on a shift of underlying fundamentals.

    I will write more on this later, I am still a little hung from a hunt I was on the last two days. Hell, maybe I will write about a south Texas dove hunt too, be very entertaining for some who have not done it.
  4. Also:

    Dollar's accelerating decline

    Colder, earlier than expected winter

    Cyclical price low

    PR, where about in South Texas?
  5. About 15 miles SW of Kenedy
  6. Pawnee?? Z-ville?
  7. RedSun


    Easy to explain: things were extremely bearish this summer, no strom shut-ins, no hot summer, and econ is slow. So the setup is that the storage will overflow and NG has nowhere to flow to.

    But in reality, there is more storage space than people know of. Some producers shut-in production and use the down time for maintenance. Then we had some early cold weather. So the end of summer storage level is lower than people thought. The smart $ was on the short-side. Now some of the smart $ wants to be on right side.

    Nov-2009 gas was the cheapest energy source on earth :) Buy it.
  8. Pascal


    Nat gas rally has nothing to do with fundamentals, or storage data. It is a basic liquidity driven asset bubble. Due to the 0% fed funds rate, all paper assets are inflating.
  9. pwrtrdr


    Also lot of this volitility is a result of eh begin and end of the roll coupled with the CL/NG spread trading, and top it off with the beginning of winter conflicting 11-15 weather reports and open interest in 5. oo options...... its all f up, one day hate it next love it....... and volatility is high so you have to pay huge premiums to own the Vol......

  10. Please explain how declining dollar affects a domestically produced and consumed commodity.
    #10     Oct 22, 2009