Natural Gas Market 05-29-2013

Natural Gas Dropped Slightly

With supply growing prices for July contracts should begin to drop.

June futures lost six cents today to settle at $4.174.   The June contract expires tomorrow.    The June 2013 contract began as the prompt month at $4.223 and will expire very close to that level.    We would expect the July contract to continue to trade within this spread of $3.88 to $4.40 area until the Bulls eventually realize that these huge storage injections are due to lost power demand and are not coming back anytime soon unless the price of natural gas retreats significantly.   Currently, there is between 3 Bcf to 4 Bcf a day of natural gas available for storage compared to last year and current projections indicate a season ending volume in excess of 3.8 Tcf.    However if this summer is even remotely average, those volumes will rise much higher. 

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