Natrual Gas Futures, which were already down 36% from the beginning of 2011, have declined another 10% this week.
The "Widowmaker" strikes again. Natgas prices broke through the psychologically important 3 level at the end of last year and are well on their way towards a 2 handle. Here's the line chart:
What's really remarkable is how natgas prices have disconnected from all other energy related commodities.
One excuse for the recent downturn is the often recited "warmer than expected winter". I'm not sure how Heating Oil and Gas Oil correlate to winter weather but as one can see from the above chart, the prices of those two commodities have been barely affected by the unseasonably warm temps.
The next chart shows natgas alongside three of the major natgas producers
Chesapeake has tracked natgas prices almost exactly whereas the other two, while they definitely have been affected by the recent downturn, have been more disconnected from natgas over the longer term. We will keep an eye out to see if that spread between RRC, EQT and natgas eventually closes back down again.
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