US GAS: Futures Rise, Stuck Near $4/MMBtu As Storm Threat Wanes
September 15th, 2010Natural gas futures were up slightly, hovering around $4 a million British thermal units Wednesday, though some doubted whether prices could stay at that level with high storage levels and the lack of MBT Sale a hurricane threat to Gulf of Mexico production.
Natural gas for October delivery rose 4.7 cents, or 1.2%, to $4.013/MMBtu on the New York Mercantile Exchange. The intraday high of $4.045 was the highest price since Aug. 25.
Gas prices have risen in each of the last three sessions, but futures sold off after briefly topping $4/MMBtu on Monday, and had trouble staying above that price again on Tuesday. Analysts said more tentative moves higher–and quick retreats back below–are likely until the market receives clear signs that supplies are tightening.
“The onerous Michael Jordan Shoes storage overhang will make surmounting technical resistance hard to breach,” with $4.20 to $4.25/MMBtu likely to be the maximum price reached before turning around, Mike Fitzpatrick of MF Global wrote in a note to clients.
Prices, however, appear to have hit bottom after sliding through most of August. Gas futures typically reach an annual low point in August or September, as cooler weather reduces the need for air conditioning, cutting the need for gas-fired electricity, while winter heating demand is still months off.
The market hasn’t received much support from the steady stream of hurricanes that have developed in the Atlantic Ocean over the last few weeks. Hurricane Igor and Hurricane Julia are both projected to turn toward the northern Atlantic rather than the Gulf of Mexico, according to the National Hurricane Center. Tropical Storm Karl, which formed in the southwest Air Jordan 2010 Gulf on Tuesday, is expected to make landfall in Mexico over the weekend.
All three storms will miss the main gas-producing portion of the Gulf, off the Texas and Louisiana coastline, by a wide margin. The Gulf produces about 11% of U.S. gas output, and the approach of a severe storm can cause prices to spike.
“Bullishness should remain Nike Air Jordan muted … unless tropical storms materialize into threats to Gulf production,” analysts with Barclays Capital wrote.
