May NYMEX natural gas futures contract “exploded” yesterday, going up 37 cents in a single day to close at $6.64/MMBtu. Yesterday’s price for NYMEX natural gas was the highest in the past 13 years. In trader’s language, “key resistance” has been in the $6.10-$6.30/MMBtu range.
Previous price rallies “petered out” after going past $6, never getting by $6.30. That’s all behind us now. So why are prices spiking now with warmer spring weather on the horizon? In a single word, fear.
Well Permits Download
Gas Wells Drilled Last 2 Years Mid Con
Traders are worried that U.S. producers are not producing enough natural gas, that our stored natgas is depleting and not getting replenished (because of a colder than normal spring), and that Europe will need even more of our gas than they take now.
More demand for the same or even slightly less supply equals higher prices.
Energy News
