Energy prices were mixed on Thursday - the liquids sank and gas soared. Spot crude oil futures in New York dipped below the $70 threshold for the first time in two months, but could not close there. At the same time, spot natural gas futures surged to a new season-to-date high after the EIA released a somewhat disturbing report.
Yesterday the EIA reported that working gas in underground storage decreased by 64 Bcf or 1.7% to 3.773 Tcf for the week ended December 04th. It was the first net delivery of the heating season. The report was also well beyond the pre-report consensus, which according to various industry surveys were around 50 Bcf. As a result, within 2 minutes following the reports release spot Henry Hub gas futures on the NYMEX surged more than 5%.
What a difference a few sessions make on the NYMEX casino. Last week, after the EIA reported a rare late season injection, Henry Hub gas for delivery into January sank to a life-of-contract low, 4.432. Yesterday, the January contract surged to a new season-to-date high print, 5.347. Thus, in one week gas has rallied (low to high) 20% or $9,150 per contract at its widest range.