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.
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.
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:
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:
Big Spikes In a Precious Metals Coming In 2014?
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.