Quantcast
Other Stories

Given weather forecast for the rest of January, storage could be heading back below 2 Tcf if February and March experience normal weather. Other than the warming risks in February and March, other fundamental factors ..

28 Jan 2013

NEW YORK(Commodity Online): US natural gas production disruptions due to freeze-offs are estimated to be as big as 1 Bcf/d in January, roughly the size of the m/m decline in production compared to December 2012 levels.

With that said, as temperatures start to rise in the Western region of the country, the markets have already observed a recovery in production in the last week through pipeline scrape data, Barclays said in a report

Prices at the moment are also supported by y/y supply shortfalls largely due to freeze-offs that shut-in wells mainly in the producing regions in the Rockies.

This week’s storage came in near consensus and brought stocks below the 3 Tcf level.

Given weather forecast for the rest of January, storage could be heading back below 2 Tcf if February and March experience normal weather. Other than the warming risks in February and March, other fundamental factors provide downside risks for natural gas prices.

For instance, nuclear generation continue to recover with y/y shortfall at only slightly above 1 GW at the moment, and is expected to see y/y growth by March.

Furthermore, production freeze-offs are likely to be completely returnedto normal by then, while some incremental production growth from 2012 levels remain likely with further infrastructure additions expected at shale gas basins, such as the Marcellus.

Natural gas prices softened slightly on Thursday morning after receiving a near consensus storage withdrawal. The market remains range bound only to be pulled by any directional change in weather forecast.

MCX natural gas for delivery on January was spotted trading at Rs.182.70/mmBtu a loss of 2.04% as of 11.10 AM IST, Monday. On the NYMEX, natural gas for delivery on March 13 was seen trading at $3.409 Mmbtu a loss of $0.057 or 1.64% as of 11.23 AM IST. 


YOUR RESPONSE
Click on the image to reload it
Click to reload image
COMMENTS (0)

@2013 COMMODITYONLINE ALL RIGHTS RESERVED