Author Topic: Natural Gas 2016s Best-Performing Commodity on Weather, Options & Exports  (Read 1318 times)

TradersCom

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Natural gas futures lay claim to being the most volatile. This year has seen that volatility drive it from one of the worst performing commodities to 2016s best performing major commodities. Natural gas is up 60 percent in 2016, the biggest gain among commodities other than zinc. There a few factors that fueled this change in fortune for natural gas.

- Polar weather headed for the western two-thirds of the US due for the second week of January
- Production in the contiguous U.S. suffering a second-straight annual drop with shale basins slowing
- Optionality, many large players had sold upside calls against production or synthetic positions
- Increasing condensate and LNG exports, on course to be a net exporter for the first time since the 1950s.

 
Image: Albany NY snow storm 2014

Energy commodity prices rose more than other commodity sectors in 2016 @EIAgov



Much like oil, natural gas prices were hammered, natty had fallen to the lowest prices since the 1990s.

With the high costs of storage and rolling gas futures contracts from one month to another the bid has been high since the cold shook the northern states and Canada. However we just saw the January contract close higher than February in a large short covering rally. Natural gas futures had rallied over 60 cents in about a week. Obviously that skewed the numbers.

Going forward it has much todo with future weather induced demand and optionality effects. Expect wild moves such as the January expiration to be the norm over the next few months.

Check out OOTTNews.com for the latest news and data on oil markets.

Happy New Year Natural Gas Traders!

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ThePitBoss

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U.S. LNG exports Continue to Grow
« Reply #1: January 02, 2017, 04:10:21 PM »
U.S. LNG exports from 2016-2020 could boom from ~1.5 Bcf/d to over 10-12 Bcf/d. The big drivers are US contract flexibility and the broadening climate commitments.

Nearly 85% of the expected U.S. liquefaction capacity has been secured under long-term contract.

Latin America Exports

Up to now Thus most US LNG has gone to Latin America.

U.S. LNG has been going to Mexico and with U.S. piped gas to Mexico via Texas at 4 Bcf/d that is a big development. The US overall has 17 Bcf/d of approved LNG for non-Free Trade Agreement nations who also are the worlds biggest importers.

Droughts & Panama Canal

Another factor is droughts that restrict hydro-power have helped US LNG exports to Brazil, and the Panama Canal expansion completed last June lowered shipping days for U.S. Gulf Coast supplies to Chile from 19 days to just 8 days .



More: http://www.forbes.com/sites/judeclemente/2017/01/01/five-natural-gas-charts-for-the-new-year/#5e91c0dd77c4

Source: Forbes, Platts
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ThePitBoss

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One way to finish on a peak down 27 cents on weekend at 3.45 Feb - weather trading at the natty casino
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TradersCom

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One way to finish on a peak down 27 cents on weekend at 3.45 Feb - weather trading at the natty casino

Some pain for sure natgas $NG_F G vol is barely up +1% after the massive 27 cent weekend move. For ref. 3.45 straddle is 34.5 cents. via @otcengine

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TradersCom

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One way to finish on a peak down 27 cents on weekend at 3.45 Feb - weather trading at the natty casino

Some pain for sure natgas $NG_F G vol is barely up +1% after the massive 27 cent weekend move. For ref. 3.45 straddle is 34.5 cents. via @otcengine

Feb now -39.90 at 3.325 #natgas vol collapsed in 10% plus move G +2% H -1.25% Yes H is down for the day @otcengine
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