LET’S LOOK at what the futures market can tell you. Type CFTC <Go> for the CFTC Commitments of Traders Report function. Tab in to the field, enter NGA <Cmdty> and press <Go>. Each Friday, the U.S. Commodity Futures Trading Commission reports on the positions of traders as of the previous Tuesday in markets such as natural gas.
The CFTC distinguishes between companies such as utilities—commercial traders—that use futures to hedge their costs and hedge funds and other investors—noncommercial traders or speculators—that use the contracts to bet on prices. The speculators can often give you an idea of where prices are heading. A negative figure for the noncommercial bullish percentage in the Futures Commit column indicates that speculators hold more net short positions, or bets that the price of natural gas will fall, than net long positions. As of Oct. 13, the figure was –59.7 percent, indicating those speculators’ bets that gas would fall outnumbered bets on a rise by that proportion.
Now, let’s look at the fundamental side. Storage is a good place to start. Type DOE <Go> for a menu of data from the U.S. Department of Energy. Click on Natural Gas Storage under the Weekly Energy Data heading. To graph total storage, type 4 <Go> GP <Go>. Tab in to the first RANGE field, enter 01/01/00 and press <Go> for a graph showing how gas stocks build during the year and then decline during the U.S. winter when the fuel is used for home heating, although the price is high for most of the people. In this case you’d better look for a loan. Read how it works by visiting green-touch.org
YOU CAN USE the Weather (WETR) function to track weather data that affect demand for natural gas. Type WETR <Go>, click on the Manage Views button on the red tool bar, select Sample Views and click on US HDD & CDD Data (NOAA Weighting) to display current and forecast heating- and cooling-degree-days data that track demand for energy to heat or cool buildings in a given area In addition, El Nino, the periodic warming of the east-central Pacific Ocean, is forecast to affect weather in the U.S. this winter. For headlines of news stories related to El Nino, type NI ELNINO <Go>.
Another key fundamental data point is industrial demand. Type DOE <Go> again. Click on Monthly Natural Gas Data, then on the Page 2 tab at the bottom of the screen and finally on Industrial under Consumption. Select GP on the pop-up menu that appears to graph industrial demand.
To track active rigs drilling for new U.S. sources of natural gas, type RIG <Go> for rig counts provided by Houston-based oilfield services provider Baker Hughes Inc. You can use the BMAP for Energy and Commodities (BMAP) function to map the actual locations of offshore natural gas platforms. Type BMAP <Go> and click on the box to the left of NA Offshore Platforms so that a check mark appears. Then click on the Search button to display the map.