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’Natural gas outrage of the day
The natural gas market has always behaved a little oddly.
First, it’s always been hugely seasonal, thus responsible for many a widow-maker trade. But now investors and traders have to contend with the impact of fracking too,
Creative ways to avoid exposure to LNG cost blowouts
Despite the prospects of entering a golden age for natural gas, investors are looking decidedly less excited about LNG.
Australia is set to take over Qatar as the biggest exporter of LNG within the next decade or so.
Who’s been trading natgas futures on the curve?
The natgas mystery continues!
Let’s start first with the following flashes from the CME via Reuters on Friday:
NYMEX PRELIMINARY DATA SHOWS NATGAS FUTURES OPEN INTEREST HIT RECORD HIGH ON JUNE 9–CME WEBSITE
PRELIMINARY DATA ALSO SHOWS NYMEX NATGAS FUTURES VOLUME SET NEW RECORD HIGH THURSDAY–CME WEBSITE
Which means the day after the mysterious mini-flash someone or some people,
An algorithim running backwards in natural gas
The folks at Nanex — the group which successfully data-mined the consolidated trade tape from the May 6, 2010 to determine the role played by algorithmic trading in the flash crash — have cast their eyes over to the natural gas futures market and Wednesday’s mini flash crash.
When algorithms fight, natgas edition
It’s not an earthquake. It’s last night’s mini-crash in natgas futures, via Zero Hedge:
“It looks like two computers getting into a competition with each other” one market-watcher told Reuters.
When commodity ETFs go wrong…
Olivier Jakob of Petromatrix observes an interesting point on Thursday regarding one of our favourite whacko ETFs, the United States Natural Gas Fund, or UNG for short.
Readers might recall how the ETF was forced to load up on natural gas swaps last year,
A nuclear primer from BarCap
Here’s a nice piece of research from Barclays Capital.
The UK bank has enlisted the help of a former nuclear safety employee to discuss events at Fukushima Daiichi, the Japanese nuclear plant hovering on the edge of meltdown.
The UK’s Japanese natgas exposure
As we reported earlier, liquefied natural gas (LNG) cargoes are being diverted to Japan to help it overcome its fuel shortages.
This, though, is having an impact on European natural gas prices — British national balancing point (NBP) prices in particular.
UK natural gas prices continue to disconnect from oil
UK natural gas prices have traditionally followed oil prices due to the practice of linking long-term contracts to crude in Europe.
Analysts in the market, however, are getting excited because of a nascent disconnect in that relationship,
A UK power desurge
In the UK, it is a well know fact that power demand surges at the end of every episode of Eastenders, Britain’s best-loved TV show.
The reason that happens — for those unfamiliar with British custom — is because millions of people simultaneously rush to switch on their kettles to make a cup of tea.
Is Gazprom buckling on long-term contracts?
A tip of the hat to Nick Drew over at the Cityunslicker blog for drawing our attention to the following gem of a natural gas market story.
As reported by Reuters late last week:
MOSCOW, Feb 19 (Reuters) – Russia’s Gazprom (GAZP.MM) has agreed to supply some of Europe’s gas at spot market prices in a bid to defend its shrinking market share after three decades of oil-indexed pricing,
The UK/US natgas divergence
See that. That’s the rather spectacular divergence between UK NBP gas prices and US Henry Hub prices of late.
According to Goldman Sachs it’s all weather related. In fact, the banks’ analysts put it down to thawing cold weather in the US and the re-emergence of the dreaded cold snap in Britain.
Crying over hot air
Last week was an interesting one for commodities reporting.
In short, the mainstream press discovered the UK natural gas market. And while it’s very nice that they should care so much about a usually under-reported market (bar end-user price-hikes),
The weather outside is frightful…
(…but the natgas-fire is so delightful.)
They’re calling it the ‘storm of the decade’ in the United States.
The winter tempest that swept through the East Coast over the weekend, bringing heavy snowstorms and sub-zero temperatures,
More UK natgas glut talk
Talk about the UK natgas/liquefied natural gas (LNG) glut appears to be intensifying.
The latest to warn over the situation is Merrill Lynch, whose analysts on Monday described the market as “plagued by weakness”
How utilities are just like banks
As we’ve reported before, UK natural gas prices are destined to stay low for the foreseeable future as a slew of liquefied natural gas cargoes, unwanted elsewhere, is redirected to British shores.
Most cargoes will have originally been intended for the US market,
LNG transatlantic arbitrage in action
Here’s a fine example of liquefied natural gas (LNG) arbitrage at work.
While hugely weak fundamentals are doing this to Henry Hub Natgas front-month futures prices :
UK NBP forward market prices were doing this:
Energy bosses rake it in despite downturn
Several oil and natural gas companies in the US and Europe boosted their chief executives’ remuneration last year, in spite of often missing performance targets or other measures of investor value,
Doth a global natgas glut come (already)?
FT Alphaville has written a lot about Nymex Henry Hub natgas futures prices and the supply glut potentially being formed in the US market.
We’ve not, however, touched upon the UK market quite as much.
Is Nymex natgas the ‘Yugo’ of the the energy complex?
…according to Stephen Schork, the analyst behind the widely-read Schork report on energy markets, it certainly is. In fact, he provides the following illustration of the communist-era car in his Monday report to emphasise the point:
Charts du jour, commodities edition
The thinkers over at Bespoke have produced some nifty charts showing ten major commodities, ranging from gold to oil to frozen concentrated orange juice.
According to Bespoke, while gold is all the range,
Why buy-and-hold can be a disaster in commodities
There’s a reason why so many investors get their fingers burned playing with commodities. Every commodity is different, every commodity has unique trading peculiarities and almost every commodity favours investors who can,
The ‘smoking gun’ in natgas
Nymex natgas futures rolled from the October to the November contract on Monday. The effect of which was as follows:
The above move comes despite more than ample supply in the physical prompt market,
Someone’s smarter than the average natgas bear
Analysts agree, natural gas fundamentals are still bearish. Despite that, Nymex Henry Hub futures went — dare we say — a little crazy this week in terms of volatility. After a massive run-up mid week,
Schork: “Nymex natgas is a bubble”
There were some very volatile moves higher in Nymex natural gas futures on Monday.For those who might be interpreting those swings as the makings of a genuine bull market, we thought we’d present some of Tuesday’s commentary on the subject.
Natgas shoots up 11%
Natural gas took on a sudden life of its own on Monday, shooting up more than 11 per cent in London afternoon trade:
Here’s how that move looks over a longer duration:
As can be seen that follows a 15 per cent move higher on Thursday and a 9 per cent correction lower on Friday — all in all making for some pretty volatile trade in natural gas of late:
Whatever happened to Deutsche’s ETN liquidation?
Petromatrix’s Olivier Jakob evaluates CFTC weekly trader data on a regular basis, and one thing he was quite looking forward to analysing was the liquidation of Deutsche Bank’s exchange-traded-note — the PowerShares DB Crude Oil Double Long (DXO).
Why the UNG is issuing new units
In case you missed the news, the United States Natural Gas Fund — the exchanged-traded-fund — posted a note to the SEC on Friday saying it planned to restart the issue of creation baskets once again.
Natural gas comeback not exactly what it seems
Natural gas staged a small comeback last week, inciting some speculation within the blogosphere that a renewed bull market might be under way in the commodity. Evidence for this, say commenters, is the now heady height of the gas-to-oil ratio above the 20x mark.
The not-so-bullish case for energy prices
The bullish case for oil has been fairly well established by the likes of Goldman Sachs, Barclays, Merrill Lynch at al.
But, as it turns out, there’s a convincing bearish case to be made too — and the man putting it forward most recently is Edward Morse,