Natural Gas: Will This Flying Saucer Be Shot Down Without Warning?
Satendra Singh | Jan 18, 2018 03:01AM ET
Natural Gas futures price zoomed on January 17th, 2018 despite the fact that it has already spurted 24% in a month. Natural gas bulls seem to be riding in a flying saucer in the bears’ territory. Any flying drone in a rival’s territory is always shoot-down without warning all of a sudden. Drones are not needed to be warned because they do not have any pilot to hear a warning and secondly they do not have any valid reason to fly.
Natural Gas Futures Historical Data
Observations
On observation of the movement of Natural Gas futures price in different chart patterns on January 18th, 2018, I find the natural gas futures price are current facing stiff resistance at the current levels.
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Conclusion
On analysis of the movement of Natural Gas futures price in different time frames, I find that the price level have touched the second strong resistance at $3.288 with only in hope of flip-flop weather announcements. Natural Gas bulls who are riding in this flying saucer do not want to hear any warning signal. I find the following valid reasons for bears to shot down this flying saucer:
1. In case of any change in current weather reports, we could see a sudden selloff with the bottom dropping out.
2. The Houston Chronicle reports that shale drillers “fearing sanctions by the state, some North Dakota oil drillers have begun cutting output to control the amount of natural gas that's being burned off at well sites and wasted as a byproduct of crude production.
3. The state's gas-gathering and processing capability is 2.1 billion cubic feet daily. In November, the latest figures available, the industry was right at that ceiling - with record 2.09 billion cubic feet (0.06 billion cubic meters) of natural gas produced daily.
4. Pipeline capacity is adequate to move the natural gas to market, but it's the lack of gas-gathering and processing facilities in between that's the problem.
5. Expected storage report of -199 Bcf would be compared to -230 Bcf last year and -203 Bcf for the five-year average.
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