Tuesday, October 27, 2015

Still a bear market in energy including Natural Gas

They [Natural Gas] are still going lower, it is 1 to 1 with crude oil prices and given that crude oil is still moving from the upper left to lower right. We have continued to see fracking going on even though we have seen drill rigs go off the edge of the cliff. We're still producing, and as long as we're still producing you're going to get RBOB gasoline going down, crude oil continues to go down, Nat Gas continues to go down, it's still a bear market in energy and it's going to continue to go down until it stops.

Nat gas has a problem because right now with El Nino out there it looks like this year we're going to have a slightly warmer, probably even a very warm winter on the east coast and that's going to put demand down as far as nat gas is concerned. The trend is clearly downward, the weather continues to be extraordinarily good – we're probably going to be one, two or three degrees warmer than last year. And if that happens, as long as there's no shutdown continually in production you might put a 1-handle up on nat gas.