If you enjoy the content at iBankCoin, please follow us on TwitterCNBC – 53 minutes ago
Natural-gas futures hit a fresh 10-year low Thursday and will likely decline further as the latest supply data confirms an abundance of U.S. gas supplies amid new predictions for a warm winter.
“We just got a report from NOAA about February temperatures being above average,” said John Kilduff of Again Capital. “That means there’s going to be below normal demand for the time being. It’s good news for consumers, and as far as natural gas prices go, you can only argue for them to go lower and lower.”
Natural gas futures (New York Mercantile Exchange: NGCV1) touched $2.33 per million BTUs Thursday, the lowest price for the front month contract since March, 2002. The U.S. Energy Information Administration reported that total domestic gas inventories fell by 87 billion cubic feet, less than expected, to 3.290 trillion cubic feet.
A new forecast from the National Oceanic and Atmospheric Administration Thursday predicted February temperatures for most of the central and eastern U.S. would be above normal. Temperatures will be most above normal from the southern mid-Atlantic states through the deep south, while the Pacific Northwest will see below normal temperatures.
Kilduff said the storage estimates for the winter season’s end, March 31, range from about 2 to 2.4 trillion cubic feet, well above the average 1.5 trillion cubic feet.
“This is a classic case of oversupply,” said Daniel Yergin, chairman of IHS CERA. done at request for office of fossil energy
Joined Nov 11, 2007
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So buying natural gas in the US and selling it abroad seems like an enormously profitable opportunity….
How does one go about arbitraging the geographic price differences?
What’s the best way to play this? What companies have a large exposure to local natural gas fields that sells to foreigners?
You need an LNG port and special tankers to keep the Liquified NG cool and under pressure. It’s done around the world, but any such proposals in the US get huge opposition so siting them is near impossible.