It's steaming up!

Natural gas (NYMEX:NGM14) rebounded as temperatures in the Midwest have heated up. While this week's injection will be more than likely average or above average, a hot steamy streak in the Midwest will once again challenge the notion that storage will get refilled at current price levels.

Russia finally gave in to China on price to get done their long negotiated natural gas deal. Russia desperately need to save face as Europe will no doubt look to reduce its dependence on Russia that has proven that it less than a reliable supplier. Russian President Vladimir Putin's signed 30-year gas export deal with China that was in the making for 10 years. China proves once again that they are tough negotiators and used Russia's current exploits to no doubt get a better price with Gazprom in the reported $400 billion dollar deal. Of course at some point the Chinese may have to deal with the fickle nature of Vladimir Putin.

Dow Jones reports European Union on Wednesday urged Russia not to disrupt natural gas flows through Ukraine and to pursue efforts to resolve its pricing dispute with Ukraine's government. In a sign of growing concerns in Europe over the deadlock between Kiev and Moscow over natural gas prices, European Commission President Jos Manuel Barroso said in a letter to President Vladimir Putin that "gas flows must not be interrupted."

Bloomberg News is reporting that Palladium reached the highest price since 2011 and investors are holding a near-record amount in funds backed by the metal on concern that supplies may be further restricted. Prices rose 16 percent this year as mine workers downed tools since January in South Africa, the second-largest producer. The three biggest platinum-mining companies and the main union at their operations in the country will today start mediation to try to end the strike. 

Supplies are being restrained and carmakers are using more palladium and platinum in pollution control devices. Shortages of the metals will be the most in more than three decades this year, Johnson Matthey Plc said yesterday. The U.S. and the European Union have vowed to tighten sanctions on Russia, the top palladium supplier, if it disrupts Ukraine's May 25 election. Russia prepared retaliatory measures in response to possible wider sanctions, said Prime Minister Dmitry Medvedev.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.


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