Natural Gas Rally Ends Monday Morning

Natural Gas Rally Ends Monday Morning

Like many expected, the three-day rally in natural gas prices came to a halt this morning on speculation that stockpiles will approach a record before winter heating demand reduces inventories. The so-called shoulder months of autumn have tempered prices and many analysts don’t expect a recovery until a cold snap prompts consumers to turn up the heat.

The market was hit by a wave of contract sales shortly after it opened at 9 a.m. in New York. Natural gas for November delivery was down 4.3 cents, or 1.2 percent, to $3.660 a million British thermal units on the New York Mercantile Exchange. The futures have declined 16 percent this year.

Prices rallied 6 percent in two days last week despite a larger-than-expected jump in stored natural gas inventories reported by the Department of Energy. Analysts are expecting another large jump in inventories when the new DOE report comes out Thursday.

“It’s hard to find something really bullish about gas when we’ve had stockpile surpluses increasing against the five-year average,” said Peter Beutel, president of Cameron Hanover Inc., an energy advisory company in New Canaan, Connecticut. “It looks like we’re going to have near-record amounts of natural gas in storage.”

Traders should expect higher prices in the near future as weather turns cooler.  On October 12, EIA released the Short-Term Energy Outlook and Winter Fuels Outlook, which projects that expenditures for natural gas, propane, and heating oil will increase by 3 percent, 7 percent, and 8 percent, respectively, from last winter. Expenditures for electricity, on the other hand, are expected to fall slightly.

Though the winter (October 1, 2011–March 31, 2012) is projected to be about 2 percent warmer than last winter, according to the National Oceanic and Atmospheric Administration, temperatures will vary widely by region. Among the highlights: the Midwest and East may see temperatures in the 30s by the middle of next week, and that seasonal heating demand could grow substantially in the next six to 10 days.

Forecasts may vary, but your business’ electricity rate doesn’t have to. When it comes to buying electricity, timing is everything. At Live Energy, we keep our finger on the market’s pulse—locking in a low rate with the right electricity provider has never been easier. For more information on how we can help you find the right electricity plan for your business, contact us at (877) 810-7770 today.

Commodity Prices ($)

Natural Gas3.703
Crude Oil86.80
Heating Oil3.0558
RBOB Gas2.8247







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