The April natural gas exchange contract traded up early in the session yesterday and then dipped slightly as the day went on, but heading into the close, the buyers stepped in handily rallying back up to make new highs and settling above the psychological resistance of $4.25. We discussed this level in the past several market commentaries, that this price area was deemed critical from a technical (charts) standpoint. Now the adage comes to fruition for energy traders out there, “forget what you believe and believe in what you see”. Many analysts continue to discuss the over-production and supply; however, the charts and the amount of short sellers in this market will propel this market higher in the short run.
In the long run, fundamentals will take over and the market might come back down to lowly levels. The volume was lighter which is a little puzzling but market prices continue to creep higher. Early estimates for this weeks storage change are storage withdrawals of about 9 bcf from both PIRA and Bentek. Last year at this time, we saw a build of 7 bcf. The much below normal temperature prediction for the 6 to 10 day period has expanded to cover a larger area while the 11 to 15 day prediction is still calling for normal temperatures for the entire country for this time of year. As far as which the market will go, the trend is up and settling above the $4.25 area opens up the natural gas market to proceed higher in the next few weeks.
According to a report on electricity report, Americans continue to discuss and consider alternative energy options and lifestyle changes amidst a slow economic recovery. Six in ten (61%) Americans describe themselves as knowledgeable about energy issues, including sources of electrical power and energy efficiency. This is relatively unchanged since 2009 when 59% of Americans described themselves as knowledgeable about energy issues. These are some of the results of The Harris Poll of 3,171 adults surveyed online between February 14 and 21, 2011 by Harris Interactive. In 2009, two in five Americans (42%) said the risks of using coal outweighed the benefits while 36% believed the benefits outweighed the risks. Further, almost one-quarter of Americans (22%) said they were not at all sure. Today, that view has not changed very much as 38% say benefits outweigh risks, but 43% believe the risks outweigh the benefits; those unsure has dropped to 19%. Eight in ten Americans (84%) say they turn off lights and appliances when not in use to conserve energy. Americans are also replacing incandescent bulbs with fluorescent bulbs (60%), using power strips (60%), using low-wattage bulbs (56%), purchasing Energy Star™ appliances (53%), and reducing hot water usage (51%). When it comes to more complex tasks such as weather stripping, sealing gaps and installation of products, the responses drop to between 29% and 38% for each behavior. Even fewer (11%) conduct home energy evaluations or audits and 5% say they engage in none of these activities.
In the lone start state this morning, Texas drilling regulators say the federal government was wrong in its accusation that Range Resources contaminated well water in rural Parker County through its natural gas drilling operations. Investigators included geochemical traces of the gas in the water wells, which they said show it didn't come from the Barnett shale formation, where Fort Worth-based Range was drilling, but rather the shallower Strawn gas field, which begins 200 to 400 feet below the surface. Range also presented information it said shows its gas wells in the North Texas County were mechanically sound and did not leak. Neither the EPA nor representatives of two homeowners who say their wells were tainted attended the Railroad Commission hearings, but in a statement Tuesday the EPA said it is standing by its prior findings, including an order forcing Range to pay for drinking water at the homes. Range and others studying the issue say the gas contamination more likely occurred because too many homes are tapping into shallow drinking water aquifers in the area. The company says that lowers water levels and hydrostatic pressure, allowing nearby natural gas to flow into the aquifer.