Where's all the doomers and gloomers?
Now that oil took another plunge on news the dollar gained against the Euro, today.
Natural Gas Futures Fall as Crude Oil Declines, Dollar Advances
By Reg Curren
Aug. 8 (Bloomberg) -- Natural gas in New York declined to the lowest in six months as crude oil fell and the U.S. dollar climbed, dulling the allure of commodities as an investment alternative.
Crude has plunged more than $32 since touching a record $147.27 in New York on July 11. The dollar gained the most in more than four years against the euro amid an outlook for major world economies to slow. Mild weather is also limiting the demand for gas-fired power generation to run air conditioners.
The stronger dollar is playing a role, as are slumping crude prices, said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey in Houston. ``Weather forecasts for cooler-than-normal temperatures to linger through the middle of August are also keeping a damper on things.''
Natural gas for September delivery fell 32.3 cents, or 3.8 percent, to settle at $8.248 per million British thermal units at 3:10 p.m. on the New York Mercantile Exchange. Futures have fallen 38 percent since June 30 as supplies expanded and crude oil prices declined. Gas touched $8.19 per million Btu after the close of floor trading, the lowest intraday price since $8.059 on Feb. 8.
When gas ``took out recent lows of $8.335 per million Btu, that brought in additional selling,'' said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. ``I don't see much support until we get down to $7.98 per million Btu. $7 is achievable next week.''
Crude oil for September delivery fell $4.82, or 4 percent, to settle at $115.20 a barrel in New York. Prices have fallen more than 8 percent so far this week. Oil dipped to $114.90 a barrel in after-hours electronic trading, a three-month low.
In cash markets, gas at the Erath, Louisiana-based Henry Hub, the benchmark pricing and delivery point for Nymex futures, fell 56 cents, or 6.3 percent, to settle at $8.22 per million Btu, the lowest since $8.06 on Feb. 8.
``This is a macro move across all commodities, with crude oil being the epicenter,'' said Chris Jarvis, president of Caprock Risk Management in Hampton Falls, New Hampshire. ``Natural gas is feeling some of the pain.''
Commodities, as measured by the Reuters/Jefferies CRB Index of 19 raw materials, today dropped to 387.42. The index declined 10 percent in July, the biggest monthly slide in 28 years, and is down 17.5 percent from a record 473.97 on July 3.
``Who's going to step in front of this train?,'' said Jarvis. ``The dollar is cranking and people are talking $109 to $110 a barrel for crude. Natural gas could go to $8.''
Only a big hurricane would ``stop the bleeding,'' he said.
Hurricanes Katrina and Rita curtailed Gulf of Mexico production in 2005, prompting gas to touch $15.378 per million British thermal units on Dec. 13, 2005, the highest since gas began trading on the Nymex.
No tropical storm formation expected in the next two days, the National Hurricane Center in Miami said today.
Oil may fall next week amid weakening demand caused by a global economic slowdown. Thirteen of 35 analysts surveyed by Bloomberg News, or 37 percent, said prices will drop through Aug. 15. Twelve of the respondents, or 34 percent, said oil will rise and 10 forecast little change.
``Crude is whacking everything,'' said Stephen Briggs, a partner at Intermarket Management LLC in Verona, New Jersey. ``It's red across the commodity screens as the dollar gets stronger.''
The euro traded at $1.5007 to the dollar at 3:24 p.m. in New York from $1.5325 yesterday.
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