After a volatile but positive week for natural gas, traders and investors are looking to the week of February 23 to see if the uptrend and reversal for the commodity can continue.
Natural gas futures for March ’15 delivery traded as high as $3.045 per mmBtu early Monday morning.
On Monday, the week begins as traders and investors process updated forecast models both for the current week and the first week of March.
Winter Storm Quantum is set to deliver snow and ice from the Rockies to the South on Monday, sending temperatures plummeting in Texas and Louisiana. The two states are both the largest state producers of natural gas while Texas is the largest state consumer and Louisiana is the third largest state consumer.
The cold temperatures in the area, known as the Producing region, could cause wellhead freeze-offs, causing decreased production and lifting natural gas prices in the region which is also home of the benchmark spot price at the Henry Hub.
On Tuesday, options expire for natural gas March ’15 contracts. According to CME Group, managed money is short the most contracts since July 2014, so significant price moves are possible.
Also on Tuesday, Range Resources (NYSE: RRC), an independent oil and gas company based in Fort Worth, TX, is set to report earnings. Analysts are expecting the company to post earnings of $0.30 per share on revenues of $490.57 million for the quarter.
Wednesday is expected to be another volatile day of trading for natural gas as traders and investors prepare for Thursday’s Weekly Gas Storage Report from the U.S. Energy Information Administration (EIA).
For the reporting period which ended February 20, early estimates from industry analysts are for a withdrawal of -240 Bcf. If actually reported, the withdrawal figure would largely beat last year’s figure (-95 Bcf) as well as the five year average (-128 Bcf). The figure would also likely create a storage deficit in comparison to the five year average; after last week’s report, a surplus of 58 Bcf was created in comparison to the five year average.
The Weekly Gas Storage Report is set to be released by the EIA at 10:30am EST on Thursday.
On Friday, traders and investors of natural gas will once again look to the Baker Hughes Rig Count Report at 1:00pm EST. Baker Hughes reported last week that total U.S. rigs declined by 48 while natural gas rigs declined by 11. The decline in natural gas rigs comes after a decrease of 14 rigs in the week prior. Total natural gas rigs now stand at 289.
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