LONDON (Commodity Online): Natural Gas prices sold off for another day as the weather outlook indicated even warmer weather for the first half of February.
Prices continues to signal to the market that it needs some kind of response either from the demand side or the supply side to balance the market or it could go even lower.
Unfortunately, most producers have not shut in their supply, while power plant operators would need take some time to figure out how to reshuffle the merit orders of Coal and gas in this new price environment.
Most market participants will be looking for signs of larger Coal displacement in the weekly storage withdrawal figures due to be released by the EIA on Thursday.
The consensus number so far is 128 Bcf. The prompt contract dropped 12 cents to $2.38/MMBtu, while the balance of 2012 suffered a nine-cent loss, down to $2.79.
Calendar 2013 fell by six cents to $3.50. Cash prices had widespread falls all over the country. Henry Hub came off by 19 cents to $2.32. SoCal Border softened by seven cents to $2.64. Transco-Z6 dropped 22 cents to $2.70.
