Natural-gas futures fall to two-and-a-half year low

At the same time, crude futures rose in a move to recover part of the loss posted a day earlier after data showed U.S. supplies of petroleum products at ample levels.

Natural gas for October delivery fell by 14.1 cents to $4.79 per million British thermal units on the New York Mercantile Exchange after reaching a low of $4.75, the weakest level the contract has seen since February 2004.

Early Thursday, the Energy Department reported that natural-gas inventories rose 93 billion cubic feet for the week ended Sept. 15.

The climb in supplies was above expectations, but within the range, according to Ben Smith, managing partner at First Enercast Financial. It was also around 15 billion above the average rise for the period, he said.

"Unfortunately, even just an average injection, given our total storage situation, would likely construed as bearish in this market," he said.

"Cooling demand season ended early this year, helping add to our already brimming total storage situation," he explained.

Analysts at Strategic Energy & Economic Research expected an increase of 92 billion cubic feet. A year earlier, they rose 76 billion and the five-year average stands at 83 billion, SEER said. Fimat USA said market expectations had ranged between a rise of 80 billion and 105 billion.

1 posted on 09/21/2006 9:38:40 AM PDT by Ernest_at_the_Beach

Total stocks now stand at 3.177 trillion cubic feet, up 356 billion cubic feet from the year-ago level, and 352 billion cubic feet above the five-year average, the government data said.

2 posted on 09/21/2006 9:39:17 AM PDT by Ernest_at_the_Beach (History is soon Forgotten,)

To: Ernest_at_the_Beach

I've seen almost no posts on FR about Amaranth - the $10B CT hedge fund that lost $6B in 4 days last week due to bad bets on natgas futures.

3 posted on 09/21/2006 9:40:24 AM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)

To: Ernest_at_the_Beach

I hope they choke on it ---- they deserve it.

4 posted on 09/21/2006 9:41:42 AM PDT by EagleUSA

I just did a quick swoop thru search and added keyword for a couple recent amaranth / hedge fund threads that did not get keyworded.

There are definitely lots of natural gas threads however. ;-0

5 posted on 09/21/2006 9:48:43 AM PDT by NormsRevenge (Semper Fi ......Help the "Pendleton 8' and families -- http://www.freerepublic.com/~normsrevenge/)

To: Ernest_at_the_Beach

Karl Rove strikes again!

6 posted on 09/21/2006 9:49:10 AM PDT by BeHoldAPaleHorse ( ~()):~)>)

To: NormsRevenge

7 posted on 09/21/2006 9:51:17 AM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)

No problem.

btw, I got out of hedge funds years ago (No, not really, I never bought into any to start with)

With falling NG futures, I can afford to buy more firewood , the cats and ma-in-law will definitley appreciate that. ;-)

8 posted on 09/21/2006 9:57:22 AM PDT by NormsRevenge (Semper Fi ......Help the "Pendleton 8' and families -- http://www.freerepublic.com/~normsrevenge/)

To: Ernest_at_the_Beach

Excellent news! Thanks for posting.

9 posted on 09/21/2006 11:17:53 AM PDT by kellynla (Freedom of speech makes it easier to spot the idiots! Semper Fi!)

To: Ernest_at_the_Beach

Was wondering when this would be noticed. Nat gas is getting down to where a TransAlaska Natgas Pipeline would not be profitable.

10 posted on 09/21/2006 11:20:21 AM PDT by RightWhale (Repeal the law of the excluded middle)

To: NormsRevenge

Firewood pollutes the air....

11 posted on 09/21/2006 11:21:36 AM PDT by Ernest_at_the_Beach (History is soon Forgotten,)

There have been posts on that. Maybe not a thread.

12 posted on 09/21/2006 11:21:59 AM PDT by RightWhale (Repeal the law of the excluded middle)

To: wideawake; NormsRevenge

U.S. hedge fund faces billions in losses on natural gas bet
http://www.freerepublic.com/focus/f-news/1703985/posts
Posted on 09/18/2006 7:44:09 PM AKDT by DebtAndDelusion

Serched Hedge for title, sorted by time

13 posted on 09/21/2006 11:34:41 AM PDT by thackney (life is fragile, handle with prayer)

That is a very interesting thread....time to watch the oil futures....

14 posted on 09/21/2006 11:55:23 AM PDT by Ernest_at_the_Beach (History is soon Forgotten,)

To: Ernest_at_the_Beach

Firewood pollutes the air....

tell that to my cats. ;-)

Burn Baby Burn!!!

15 posted on 09/21/2006 11:56:28 AM PDT by NormsRevenge (Semper Fi ......Help the "Pendleton 8' and families -- http://www.freerepublic.com/~normsrevenge/)

To: wideawake; NormsRevenge

Speaking of Amaranth.....:

Commentary: Amaranth losses underscore the danger, lure of hedge funds

********************************************EXCERPT*******************

y David Weidner, MarketWatch

Last Update: 12:01 AM ET Sep 21, 2006

NEW YORK (MarketWatch) -- The latest hedge fund horror story comes to us this week from Amaranth Advisors, a firm named after a flower. The name must have sounded pretty to investors, but now, after giving it the sniff test, they know what we do: it's just good ol' pigweed.

Amaranth, based in Greenwich, Conn., took a beating in the natural gas markets during the last few sessions and lost 35% of its value. Depending on which report you believe, that could be somewhere between $3 and $5 billion. It doesn't matter, really. Because when star trader Brian Hunter tells his grand kids in 2040 about it, the number will probably be even bigger.

As is the case with hedge funds there are two camps on the fallout of Amaranth. Apologists for the industry say since Amaranth is self contained, its positions small relative to the commodities market and the fund has met its debt obligations. The losses are just a bad, albeit very bad, day at the office.

Of course, the Chicken Littles of finance are saying "we told you so" the $1 trillion wrapped up in 8,000 or so hedge funds is going to bring down the system. They will fall like dominoes knocking over Park Avenue skyscrapers as they plunge us into financial chaos.

Park Avenue and Wall Street are doing just fine thank you very much due, in no small part, to the hedge fund industry. Though we've heard a lot about hedge funds becoming buyers, not unlike private equity funds, they are still almost exclusively trading operations that need the support of big trading floors -- what's called prime brokerage -- to raise capital, execute trades, custody and clearing and make big and small bets.

The hedge high

Earlier this summer, Morgan Stanley analysts estimated prime brokerage revenue in the industry rose 29% in 2005 to $5.2 billion and were on track to rise another 25% this year. Total spending on prime brokerage was $10 billion last year, according to a May report by TABB Group.

The issue these days is risk. Since hedge funds trade on margin, banks need to be sure they have the collateral from the banks to back the loans. Ever since Long-Term Capital Management needed a bailout in 1998 banks appear to have been careful about extending credit to hedge funds.

But there is pressure to bend the rules. Big brokers are earning less on each trade than they did even a few years ago. Hedge funds are fantastic clients. They trade all of the time. They are savvy.

16 posted on 09/21/2006 12:02:40 PM PDT by Ernest_at_the_Beach (History is soon Forgotten,)

To: Ernest_at_the_Beach

What is copper doing?
I just priced some electrical wire for a room upgrade.
Ouch!

17 posted on 09/21/2006 12:03:05 PM PDT by Ramcat (Thank You American Veterans)

To: Ernest_at_the_Beach

LTCM almost caused a huge amount of problems because they couldn't make their margin calls on a billion or so in securities.

Amaranth, amazingly, has managed to make its margin calls on almost 6B of securities in a three week period.

It's like night and day - and all that occurred with little change in regulatory oversight.

No one wanted to be the next LTCM, with the result that the even next LTCM wasn't the next LTCM.

18 posted on 09/21/2006 12:06:23 PM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)

To: Ernest_at_the_Beach

Slow hurricane season having a LOT to do with this, perhaps?!

19 posted on 09/21/2006 12:14:55 PM PDT by NotJustAnotherPrettyFace

To: Ernest_at_the_Beach

"Cooling demand season ended early this year, helping add to our already brimming total storage situation," he explained.

Hey! What happened to the global warming?!

20 posted on 09/21/2006 12:16:11 PM PDT by NotJustAnotherPrettyFace

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