Natural Gas Spot Price

MARKET WATCH: Expiring oil contract up slightly; gas breaks losing streak

HOUSTON, June 22 -- The price of crude inched up modestly June 21 in the New York market despite support from a weaker dollar and a strong US equities market; however, natural gas rose 2% on forecasts for warmer weather, ending a seven-session losing streak.

“The broader market (and the euro) rose for the fourth straight day as the Standard & Poor’s 500 index gained more than 1% on expectations that Greek Prime Minister George Papandreou would win yesterday evening's confidence vote. As anticipated, Papandreou secured the victory, thereby improving Greece's prospects for receiving additional financial aid,” said analysts in the Houston office of Raymond James & Associates Inc.

“Oil prices continued to struggle yesterday despite optimism across many major equity markets owing to eased concerns over the euro-zone debt crisis,” said James Zhang at Standard New York Securities Inc., the Standard Bank Group.

Olivier Jakob at Petromatrix, Zug, Switzerland, said, “Rather than trading a correlation to the exogenous inputs, the crude oil complex was capped by flat price pressure coming from Brent, and the European complex was really under the pressure of InterContinental Exchange (ICE) gas oil.” The ICE gas oil crack is “losing steam,” with December 2011-December 2012 contract prices back into a contango structure, he said.

“The pressure on the gas oil crack will also put some additional pressure on the refining margins. The naphtha crack remains very weak, the gasoline crack is weak, and European refineries have been running at minimum rates. If the gas oil crack continues to weaken, then we will move deeper into the risk of more significant run cuts…on both sides of the Atlantic. If this was to happen, it should translate into pressure developing on the Brent time-spreads, with some erosion in the backwardation structure of Brent,” Jakob said.

Zhang said, “The front-end of the Brent structure strengthened, following further delays in delivery of physical North Sea cargoes, while West Texas Intermediate structure weakened as Cushing, Okla., inventories grew again. Gasoline and middle distillate cracks softened further yesterday, which weighed on refining margins in Europe, and in turn, is likely to keep crude prices under pressure.”

As the Brent-WTI spread narrowed, the premium of Light Louisiana Sweet crude over WTI has exceeded the Brent-WTI spread, “which suggests that it has again become more attractive to move crude cargoes over to the US instead of Europe,” said Zhang. “This is likely to relieve the pressure on the European crude market to some extent, and to provide some support to the weakening Brent structure.

Oil & gas prices moderately changed gold & silver inclined June 20 ...

WTI Spot oil price started the week with a moderate drop of 0.27% as it reached $93.26 per barrel; during June the WTI spot oil price fell by 9.2%.

Brent spot price on the other hand declined yesterday by 1.51% to $111.78 per barrel.

As a result, the difference between Brent and WTI declined to $18.52.

Natural gas Henry Hub future price (July delivery) also fell by 0.23% to $4.32 per mmbtu. The Henry Hub spot price fell by 1.37% to $4.33/mmbtu; as a result the gap between the spot and future price rose to -$0.01, i.e. backwardation. During June, natural gas spot price (Henry Hub) declined by 6.5%.

Trading commodities, forex, stocks, options, ETFS etc. (trading) carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader’ level of experience should be carefully weighed before entering the trading market. There is always a possibility of losing some or all of your initial investment or deposit, so you should not invest money which you can’t afford to lose. The high risk that is involved with trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Tradingnrg.com or on other sites that have received permission to republish the content originating on Tradingnrg.com reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Tradingnrg’s authorized authors. Tradingnrg has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote, forecast and outlooks or any other information contained on Tradingnrg and permitted re-published content should be taken as general market commentary. This is by no means investment advice.