No oil prices breakout, the same for natural gas

Working gas in storage was up at 1,629 billion cubic feet (Bcf) as of April 17, 2015, according to the US Energy Information Agency (EIA) estimates. Stocks were thus 737 Bcf higher than last year at this time and 101 Bcf below the five-year average, the agency said. “In reality gas price depends on oil price,” a 2014 report published by Russian energy company Gazprom read. “The gas price is the price which a buyer would have to pay for petroleum substitutes in case of non-delivery of gas in order to attain the equal energy effect (so called principle of substitution),” it explained. That’s why as long as oil prices remain low, so do gas prices; not to mention that the current supply/demand structurally adds to the bearish trend. As of today, most of the analysts think it’s however too late to short natural gas prices and that one’d better be preparing for some small rebound from the current price of $2.55 to around $2.80/$2.85 this summer, which corresponds to the banks’ 2015 average price forecast.