Terra Incognito
Hot weather in the West, a structurally changed supply and demand equation, and
doubt that the economic fundamentals are improving are factors pushing natural gas
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PowerRating)
to the highest level since the inception of the contract ten years ago. Used for
firing electrical generation plants, for heating, for cooling, and increasingly
seen as an alternative fuel source to crude and heating oil, demand–or the
perception of demand–has never been so strong and players are asking how high is high as the contract ventures into uncharted territory.
The weekly figures from
the American Gas Association will be released Wednesday and expectations
are for 50-60 billion cubic feet, compared to 81 BCF last year. Drilling and
extraction of natural gas is at record levels and we are still more than 400 BCF
below levels from one year ago. Technically, the contract registered on the Momentum-5
List and continues to make good on an inverted head-and-shoulders setup, a
setup mentioned in the Sept. 5 Futures
Market Recap. Nat gas is up 137 to 5.145 and is holding its own despite a
just-released news bulletin from OPEC in which the oil cartel said it would increase its
output beyond the 800,000 barrels agreed to at last Sunday’s meeting on quotas policy.
An early indication of momentum–either up or down–is
often given by contracts on the New 10-Day Low List.
Dow futures
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PowerRating) are logging a triple-digit loss after registering on the
list, with JP Morgan again playing the critical role on the Dow average.Â
Momentum-5
List member copper
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to remains on essentially a two-week rally and is up .15 at 93.00. Copper demand
is often a leading economic indicator for economic growth, and its rise is at
odds with what many economists believe is a period of slower global economic
growth.