Natural Gas

[behappyalways]

LNG exports from US set to stir up global markets
http://www.businesstimes.com.sg/premium ... s-20141002

[winston]

Natural gas prices sink to an 11-month low… traders worry that a mild winter will hurt demand for the fuel.

[winston]

Natural gas fund UNG hits an all-time low… shares plummet more than 30% in the past two months.

[winston]

Natural gas prices plummet more than 40% over the past eight months.

[winston]

Natural gas prices are down 20%-plus over the past three months.

[winston]

Natural gas fund UNG is down 45%-plus over the past year.

[winston]

Major changes could be coming for natural gas by Dave Forest

I discussed last month how natural gas supply problems have been hitting Europe of late. And based on reports this week, it seems those issues may be deeper than originally expected.

Platts reports that Europe has lately become the world’s go-to natural gas market, with prices for the commodity on the continent actually flipping to a premium over other big buyers like Asia.

That trend began in mid-February, when natural gas prices at the U.K. National Balancing Point (NBP) hub climbed higher than the so-called JKM (Japan-Korea Marker) price for liquefied natural gas being shipping into these Asian countries.

And over the past month, the gap between European and Asian natural gas prices has widened, with NBP gas currently selling for a premium of $0.40 per MMBtu.

That’s a major shift − given that Japan-Korea LNG used to be the world’s premier sales outlet for natural gas. In the wake of the Fukushima nuclear shutdown, for example, JKM marker prices climbed to $20 per MMBtu, making this by far the best place around the globe to sell gas.

But the JKM marker price has been steadily eroding over the past year (see “Is This Big Story In Energy Already Fading?” − August 5, 2014), to the point that April LNG deliveries here are now going for just $7.29 per MMBtu — a price decline of 60%, year-on-year.

That weakness has allowed the critical crossover in European and Asian prices noted above, especially in light of recent supply restrictions at Europe’s largest natural gas field — Groningen in the Netherlands (see “A Massive Natgas Production Cut You Didn’t Hear About” − February 12, 2015).

The loss of output from this massive field appears to be driving European prices to some of the highest levels in the world at the moment, which is reportedly causing LNG supplies to be diverted to this market − in effect, helping put a floor on the global natural gas market.

This should help stem the declines we’ve seen of late in Asian LNG prices. And the global natural gas market could actually see more upward pressure, as South American LNG buyers are reportedly beginning to bid aggressively against Europe’s consumers.

Watch for better prices here, coming soon…

Source: Pierce Points

[winston]

not vested

This little-noticed announcement could be great news for natural gas by Dave Forest

A very important, although little discussed, news item emerged Friday. It could have major consequences in U.S. natural gas prices.

The announcement in question was that two of the world’s largest private-equity (PE) firms are buying into Mexico. Specifically, supporting the development of key natural gas pipelines in the country.

PE stalwarts BlackRock and First Reserve said they have committed a 45% interest in two Mexican pipeline projects: Los Ramones Phase II North and Los Ramones Phase II South. The price for the investment was not revealed − but will likely run into the billions of dollars.

That’s because the Los Ramones pipelines are two of the largest pieces of energy infrastructure to be built in Mexico in a long while. Combined, the two pipes will run for 744 kilometres, connecting the northern and central parts of the country − aiming to link Mexican natural gas buyers with the abundant supply created by shale gas in America.

Plans for the Los Ramones system have been on the books for years now. Spurring natural gas firms in the U.S. to build a number of new pipeline projects the last few years, aimed at carrying nat gas from big shale plays like the Eagle Ford to the Mexican border.

But from there, things have looked somewhat stalled of late. Because nat gas infrastructure on the Mexican side appeared to be developing much slower than in America’s.

But the BlackRock/First Reserve funding of Los Ramones gives a major shot in the arm to this part of the export picture. These billion-dollar firms will now partner with Mexican state petroleum giant Pemex to complete the pipelines − nearly guaranteeing that sufficient capital and expertise will be available.

The best part for U.S. nat gas producers is that construction on the Los Ramones system is already underway. With full operations expected to commence in mid-2016.

Projections say that Mexican demand from this system could draw up to seven billion cubic feet per day of exports from America − equal to nearly 10% of total current production across the country. Those are the sorts of numbers that could start to move prices. Energy investors should be marking this project completion date in their calendars.

Source: Pierce Points

[winston]

Natural gas prices sink 45% over the past year.

[winston]

It's Time to Buy Natural Gas By Jeff Clark

Natural gas is set to break out.

Last year at this time, the price of natural gas was trading at nearly $5 per thousand cubic feet (Mcf). Two weeks ago, natural gas bottomed at about $2.50 per Mcf. That's a drop of 50%.

This drop isn't too much of a surprise. After all, natural gas often trades in sympathy with oil. And since oil prices have fallen dramatically over the past year, it's normal for natural gas to be trading lower as well.

But the price of oil has been rallying lately. A barrel of benchmark West Texas Intermediate (WTI) crude oil traded for just more than $40 one month ago. It closed at $56 per barrel last Friday. That's a 40% spike in just one month. Meanwhile, natural gas has barely budged off its bottom. It has been left behind by the recent oil rally.

That's about to change…

Two weeks ago, my colleague Matt Badiali told you about the fundamental case in support of higher natural gas prices – increasing demand from Mexico.

Not only is the fundamental case strong for higher natural gas prices… the technical case is supported as well.

Take a look at this chart…

Please Enable Images to See this

The bottom in the price of natural gas two weeks ago was lower than the previous bottom in February. But while the price was making a lower low, the Moving Average Convergence Divergence (MACD) momentum indicator made a higher low. This "positive divergence" is often an early warning sign that a downtrend is ending and a new uptrend is ready to begin.

Also, while it's going to take some work to complete it, we have the beginnings of an inverse head-and-shoulders pattern on the chart. This is a reversal pattern that often signals the end of a bearish move and the start of a bullish one.

The left shoulder formed in February when natural gas bottomed at about $2.60 per Mcf. Natural gas then rallied up to resistance at about $2.90 – thereby establishing the neckline of the pattern.

The recent drop to $2.50 per Mcf two weeks ago established the "head" of the inverse head-and-shoulders pattern.

Now, we should get another rally up toward the neckline at $2.90, followed by a drop back down toward the $2.60 level to form the right shoulder.

If this pattern plays out, then any subsequent rally that breaks above the neckline should lead to an immediate move higher toward $3.30 per Mcf. That's almost a 30% gain from Friday's closing price.

Traders can set a stop loss at the April low of $2.50 per Mcf. If natural gas prices break below that, it would negate the potentially bullish setup and traders would stop out for a small loss.

In short, right now, natural gas prices are supported by the current rally in oil, there's increasing demand in Mexico, and the technical picture looks bullish.

This is an excellent setup for a low-risk trade in natural gas.

Source: Growth Stock Wire