Prices up on EIA report
Natural gas prices climbed above $3.00 per MMBtu yesterday for the first time since mid-January. Natural gas prices jumped about 4.1% to as high as $3.02 Thursday, following the release of the Energy Information Administration’s (EIA) report on weekly natural gas storage.
The EIA report showed a natural gas injection of 111 Bcf for the week ended May 8, 2015, slightly below expectations. EnerCom’s Natural Gas Roundup for the week ended May 8 shows an average prediction for 114 Bcf of injections. The smaller than expected injection helped to keep total inventories 2% below the five-year average, totaling 1,897 Bcf.
Too much, too fast
“For me, the rally in natural gas is too strong, too rapid,” said Alessandro Gelli, analyst at Diapason Commodities Management SA, which manages about $4 billion in assets. The firm has stayed out of natural gas bets because the market has become too difficult to read, he told The New York Times.
The sudden spike in natural gas prices was followed by some selloff, with prices dipping below $3 Friday before coming back up. “Prices are overvalued and are currently becoming more susceptible to a downside correction,” Dominick Chirichella, analyst at the Energy Management Institute said. At the time of this article’s writing, natural gas prices were up slightly at $3.017 per MMBtu.
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