Friday\u2019s Forecast Shift Sealed the Market\u2019s Fate<\/p>\n
Friday\u2019s events essentially sealed the market\u2019s fate, but it took the weekend reports to indicate that winter\u2019s strongest time period is now history. On Friday, the forecasts turned warmer and the rig counts jumped. So essentially, we\u2019re looking at a classic low demand, high supply situation.<\/p>\n
The price action also suggests that traders aren\u2019t concerned about the small deficit in storage against the 5-year moving average. They feel that the expected increased production will make that up quickly and well before the summer cooling season. This explains the muted reaction to last week\u2019s massive government storage draw.<\/p>\n
Record 360 Bcf Draw Gets Ignored<\/p>\n
Last Thursday, the Energy Information Administration (EIA) reported in its weekly storage report for the week ended January 30. The government reported a record 360 Bcf draw, smaller than the consensus estimate but well above the 5-year weekly average draw of -190 Bcf. That massive draw put storage 1.1% below the 5-year seasonal average. The results signaled tighter natural gas supplies, but traders didn\u2019t flinch. They knew higher production and warmer temperatures were coming because their focus is always 10-15 days forward. Let the amateurs react to the headlines, they were probably saying\u2014we need someone to sell it to for the long run.<\/p>\n
Warm Weather Through February 20<\/p>\n
As far as the weather is concerned, NatGasWeather.com sees national demand lower over the next seven days. The Commodity Weather Group said Monday that above-average temperatures are expected across the Midwest and South through February 20. To go along with this, on Friday, Baker Hughes reported that active U.S. natural gas drilling rigs jumped to a 2.5-year high, an obvious warning of higher gas production.<\/p>\n
Technical Outlook: Multiple Headwinds in Place<\/p>\n","protected":false},"excerpt":{"rendered":"Friday\u2019s Forecast Shift Sealed the Market\u2019s Fate Friday\u2019s events essentially sealed the market\u2019s fate, but it took the…\n","protected":false},"author":2,"featured_media":466022,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,17679,6349,31700,31701,31702,4740,31703],"class_list":{"0":"post-466021","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-commodities","12":"tag-daily","13":"tag-fundamental","14":"tag-home-page-4","15":"tag-james_gas_forecast","16":"tag-natural-gas","17":"tag-technical"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/466021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=466021"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/466021\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/466022"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=466021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=466021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=466021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}