For weather that effects the natural gas market(Cooling Degree Days in the Summer help gauge residential natural gas use because natural gas is used to generate electricity for air conditioning:
From Natural Gas Intelligence:
September Natural Gas Set to Open Lower as Near-term Cooling Halts Six-Day Rally
8:53 AM
September natural gas prices were decidedly in the red ahead of Friday’s market open, trading 3.5 cents lower at $2.92, as traders banked on cooler weather and lighter demand for the weekend and in the weeks to come.
Storage is LOW for this time of year!! This is why the temperature forecast matters.
Storage is just below the bottom of the previous 5 year range and also almost 700 bcf below last year at this time!
EIA storage report from yesterday:
+46 BCF! -Neutral
From NGI: EIA Reports Near-Target 46 Bcf Injection; September Natural Gas Trades Sideways
Working gas in underground storage, Lower 48 states Summary textCSVJSN | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Historical Comparisons | |||||||||||||||||||||||||
Stocks billion cubic feet (Bcf) | Year ago (08/03/17) | 5-year average (2013-17) | |||||||||||||||||||||||
Region | 08/03/18 | 07/27/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
East | 575 | 552 | 23 | 23 | 670 | -14.2 | 672 | -14.4 | |||||||||||||||||
Midwest | 579 | 552 | 27 | 27 | 769 | -24.7 | 732 | -20.9 | |||||||||||||||||
Mountain | 148 | 146 | 2 | 2 | 202 | -26.7 | 180 | -17.8 | |||||||||||||||||
Pacific | 245 | 250 | -5 | -5 | 290 | -15.5 | 316 | -22.5 | |||||||||||||||||
South Central | 807 | 808 | -1 | -1 | 1,095 | -26.3 | 1,026 | -21.3 | |||||||||||||||||
Salt | 200 | 203 | -3 | -3 | 291 | -31.3 | 275 | -27.3 | |||||||||||||||||
Nonsalt | 607 | 604 | 3 | 3 | 804 | -24.5 | 751 | -19.2 | |||||||||||||||||
Total | 2,354 | 2,308 | 46 | 46 | 3,025 | -22.2 | 2,926 | -19 |
The 7 day period below covered the period on yesterday's report with +46 bcf injected. The next 7 day period will end, Friday 8-10-2018.
Natural gas breaking out to the upside but bumping up into some tough resistance ahead. Storage data yesterday was neutral after being bullish the previous 3 weeks(expectations for big increases in supplies coming soon are potentially bearish down the road....we will see):
Natural gas 3 months |
Naturalgas 1 year below
Naturalgas 5 years below
Naturalgas10years below |
Seasonals based on historical prices.
Release Date: August 7, 2018 | Next Release Date: September 11, 2018 |
https://www.eia.gov/outlooks/steo/
Natural Gas
NG is down imo because early morning model consensus/forecasts are slightly cooler in the week 1-2 period vs 0Z yesterday despite the European suite being warmer than yesterday’s 12Z. Let’s see whether or not the 12Z guidance changes things significantly.
I disagree Larry. Model guidance was warmer overnight. CDD's were higher and especially for a European model ensemble to be so much higher.......but also the operational Euro.
The GFS CDD's were higher too.........the coolest one was the 18z from yesterday.
However, the Canadian and GFS ensembles...............late in week 2 were cooler and that leads into the one item that really turned cooler overnight, the CFS week 3 product.
The main forecast that was MUCH cooler compared to Thursday was the week 3 CFS.
Also, ngu was at some really strong resistance and has rallied a decent amount.
We got up here with some pretty bullish EIA storage reports.......then yesterday, it was neutral...........which "neutralized" that bullish factor a
I had said:
"NG is down imo because early morning model consensus/forecasts are slightly cooler in the week 1-2 period vs 0Z yesterday despite the European suite being warmer than yesterday’s 12Z. Let’s see whether or not the 12Z guidance changes things significantly."
Mike then responded:
"I disagree Larry. Model guidance was warmer overnight. CDD's were higher and especially for a European model ensemble to be so much higher.......but also the operational Euro.
The GFS CDD's were higher too.........the coolest one was the 18z from yesterday."
However, the Canadian and GFS ensembles...............late in week 2 were cooler"
-------------------------------------------------------------------------------------------------------------------------
Mike,
I say we're actually both right but we're saying it differently I think. This is tricky:
1) I agree that today's 0Z operational Euro is warmer than 24 hours earlier (by ~2 CDD) and much warmer than 12 hours earlier (by `~5.5 CDD for 8/10-17). When i was talking about warmer model consensus, I should have been clearer as I was referring only to the more credible 0Z GFS and Euro ensembles (see below) and not to the respective operationals which, indeed, were both warmer vs 24 hours earlier.
2) We both agree that the 0Z GFS ensembles were cooler than 24 hours earlier late in week 2. That along with some slightly cooler changes days 1-10 made the full 2 week 0Z GFS ensemble run clearly cooler than 24 hours earlier.
3) Now for the tricky part, the 0Z Euro ensemble. I agree it was significantly warmer than the 12Z run of yesterday. for the days 8/10-22, I have it a whopping 7 CDD warmer. But don't forget that the 12Z run of yesterday was much cooler than its prior run, yesterday's 0Z, by an even greater 9 CDD for 8/10-22! That means that today's 0Z ensemble was actually still 2 CDD cooler than 24 hours earlier for 8/10-22 despite being a whopping 7 CDD warmer than 12 hours earlier!
Now, if we were looking at the entire run, which isn't exactly apples to apples, it shows similar results:
0Z 8/9 run for 8/9-22: 182.84 CDD
12Z 8/9 run for 8/10-23: 171.31 CDD
0Z 8/10 run for 8/10-23: 178.62 CDD
Thanks Larry!
Here were the closing comments from Natural Gas Intelligence:
Natural Gas Futures Lose Steam, but Bears Have Plenty to Prove; Spot Market Slides
5:46 PM
A roughly 20-cent rally in the front month going back to Aug. 2 showed signs of running out of steam Friday as prices pulled back around a penny, but recent gains suggest the burden of proof has shifted to record production to show it can meaningfully work down inventory deficits before winter.