Natural Gas & Precious Metal Prices To Spike Higher In 2014

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Natural Gas  Precious Metal Prices To Spike Higher In 2014

Natural Gas Precious Metal Prices To Spike Higher In 2014

Something utterly engaging is holding place in a U.S. healthy gas marketplace this year.  As wintry temperatures blanketed a whole East Coast this winter, record healthy gas direct has resulted in multi-year lows in gas storage levels.

The EIA came out with their Natural Gas Storage Report now display a overwhelming 34% reduce gas storage turn compared to a same time final year.

U.S. Natural Gas Storage 21314

If we demeanour during a light blue line (2014 storage trend), we will notice that stream gas storage turn is already subsequent a lowest turn reached during a finish of March, 2013.  The dim blue dashed-line is my determination of where a storage turn will be by a finish of Mar this year.

Furthermore, a lowest 5- year operation of gas storage has never depressed subsequent 1,600 billion cubic feet.  The information from a EIA Natural Gas Storage list shows that we have already reached this impassioned low point.

U.S. Natural Gas Storage Table 21314

Last year’s Feb. 7th storage turn was 2,549 Bcf (billion cubic feet), since this year a volume is 863 Bcf reduce during 1,686 Bcf.  This is unequivocally disconcerting since a marketplace will continue to pull gas reserve from subterraneous storage until a finish of Mar (based on 5-year trends).

Energy researcher Bill Powers (who we interviewed in January) believes we could see a gas storage turn during 1,200 Bcf by a finish of this month.  If a cold continue settlement plaguing a North East continues for a rest of a winter, we could see a U.S. gas storage turn strech 800 Bcf by a finish of March.

If a healthy gas storage turn falls this low, it will put serious aria on a U.S. healthy gas marketplace going into a open and summer (the time when a attention starts to reconstruct a subterraneous storage supplies).  Already traders are pulling a cost of healthy gas good above a $5 level:

Bloomberg Natural Gas Price Feb 13 2014

UPDATE:  The cost of Natural Gas sealed adult $0.40 (8.3%) during $5.22 now and is now adult $0.07 (1.3%) during $5.29 in a unfamiliar markets.

Bill Powers (last year) forecasted that prices of healthy gas would strech $5-$7 with most aloft spikes in a subsequent few years.  We have already reached $5 turn and will some-more than expected see most aloft healthy gas prices as a record draw-down of subterraneous gas storage continues.

Another cause that could outcome in most aloft healthy gas cost spikes is a inability for a attention to say stream shale gas production.  As we mentioned in my progressing article, 2014: The Year The Shale Gas Bubble Bursts The Boom For Precious Metals?, a annual U.S. healthy gas decrease rate is a towering 24%.

Thus, a attention has to reinstate scarcely 100% of a prolongation in 4 years to keep prolongation prosaic — most reduction growing.  This is a whole lot of gas folks.

I will yield some-more sum of a U.S. and universe appetite conditions in my upcoming U.S. GLOBAL COLLAPSE REPORT out after this month.

I suggest Bill Powers book, Exploding The Natural Gas Myth: COLD, HUNGRY AND IN THE DARK.  You can also follow him during his chatter residence below:

https://twitter.com/billpowers1970

Big Spikes In a Precious Metals Coming In 2014?

Kitco Gold  Silver 21314

As a cost of healthy gas surfaced above $5 today, Gold finally surpassed a psychological $1,300 level.  This is utterly engaging as a largest bullion writer on a planet, Barrick usually expelled a Q4 2013 formula showing  “All-in costs” for mining bullion during $1,317 an ounce.

As record direct for a yellow steel continues in 2014, a stream cost of bullion is still subsequent a sum cost of prolongation from one of a largest bullion miners in a world.

The problem now plaguing a mining and appetite attention is a outrageous boost in collateral expenditures as prices sojourn prosaic (oil) or decrease (gold).

For example, Goldcorp constructed 2.6 million oz of bullion in 2013, though settled an estimated disastrous $1.3 billion in Free Cash Flow.  Free money upsurge is conflicting from money flow.  To get Free Cash flow, we concede collateral expenditures and dividends from a operation money flow.

What this means is that Goldcorp is spending some-more on Capex and dividends than it is creation by a operations.  Goldcorp isn’t a usually bullion writer pang from disastrous giveaway money flow, many of a tip bullion miners are as well.

For instance (according to Y-charts.com), Barrick settled a disastrous $913 million in giveaway money upsurge for a initial 9 months of 2013.  we would suppose this figure will boost as a formula from a fourth entertain are included.

So a here’s a question… how can a tip bullion miners news $1,100-$1,300 All-in costs, when their giveaway money upsurge is negative?  Of march some of a collateral expenditures are for new projects, though many of these new mining projects will supplement prolongation usually to equivalent declines or designed shut-downs from comparison mines.

2014 might indeed be a pivotal year for a financial markets.  There are so many disastrous factors going forward, I trust a broader batch bond markets will finally stoop to a weight of a Hundred Trillion Dollar Derivative Monster.

David Stockman, Former Director of a U.S. Office Management Budget spoke about a outrageous derivative burble in a recent interview with King World News.  He believes Fed Chairman Janet Yellen and a Keynesians during a Fed are personification with “Fire” with their violent financial policy.

Eric King asked David Stockman’s opinion about a Fed’s large trade room:

That (Fed) trade room is a arms of financial mass destruction.  That is a indicate that people need to understand.  The people using a Fed now have no idea of a risk that they are formulating with this large marketplace strategy and intervention.

The marketplace isn’t trade on fundamentals whatsoever.

…… we know, a Gold Market could raze during any moment.

Stockman unequivocally sums adult a whole financial conditions in those few sentences.  If we haven’t listened to a interview, we rarely suggest it.

As a U.S. and universe pierce closer towards financial collapse, a sensitivity in a markets will continue to increase.  With a cost of bullion and china still nearby their cost of production, we trust a sensitivity will impact a changed metals in a certain way, since a broader batch markets will humour a conflicting reaction.

2014 might good be a year that a cost of healthy gas, bullion and china all spike together.

 

Courtesy: SRSroccoreport