Re: Nat. Gas Market and Options
The Archer report (link located at the bottom of the NG options quotes page on this site) suggests that next week's storage report will indicate net injections significantly lower than the seasonal average, but that longer range weather forecasts and high production numbers, plus a challenging economy, will tend to pull NG toward 3.75 by the end of the month. I completely agree that next weeks storage number will be low...near 70 Bcf probably, but I don't see significant cooling for the south, TX, most of the NE (from NY and down the seaboard) or the Ohio Valley through the end of the month. The weather ensembles I consult maintain more-or-less the high heat pattern over much of the US west of the Rockies without a break through July 17. Also, the pace of tropical system formation in the Carribean is likely to pick up after the first week of July. So I disagree with the Archer longer-range forecast, and agree with your analysis, Coral. As the mainly hot summer continues, the tendancy for overall storage to be below the 5 year average should persist heading into the Fall. Any significant tropical system will create spikes that can be taken advantage of provided one owns a few cheap calls (for August through Oct).