Natural Gas Friday
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Started by metmike - Aug. 10, 2018, 10:11 a.m.

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:

https://www.marketforum.com/forum/topic/10277/

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By metmike - Aug. 10, 2018, 10:12 a.m.
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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.

By metmike - Aug. 10, 2018, 10:13 a.m.
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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!

Working Gas in Underground Storage Compared with Five-Year Range

By metmike - Aug. 10, 2018, 10:14 a.m.
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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) 
Region08/03/1807/27/18net changeimplied flow  Bcf% change Bcf% change
East575  552  23  23   670  -14.2  672  -14.4  
Midwest579  552  27  27   769  -24.7  732  -20.9  
Mountain148  146  2  2   202  -26.7  180  -17.8  
Pacific245  250  -5  -5   290  -15.5  316  -22.5  
South Central807  808  -1  -1   1,095  -26.3  1,026  -21.3  
   Salt200  203  -3  -3   291  -31.3  275  -27.3  
   Nonsalt607  604  3  3   804  -24.5  751  -19.2  
Total2,354  2,308  46  46   3,025  -22.2  2,926  -19
By metmike - Aug. 10, 2018, 10:16 a.m.
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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.

http://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20180803.7day.mean.F.gif

By metmike - Aug. 10, 2018, 10:29 a.m.
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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                
                   
By metmike - Aug. 10, 2018, 10:30 a.m.
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Seasonals based on historical prices.

Erdgas Future saisonal

By metmike - Aug. 10, 2018, 10:30 a.m.
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Short-Term Energy Outlook from the Energy Information Administration:

        

            Release Date: August 7, 2018 |             Next Release Date: September 11, 2018 | 


https://www.eia.gov/outlooks/steo/


Natural Gas

 

  • EIA estimates dry natural gas production was 81.8 billion cubic feet per day (Bcf/d) in July, up 0.4 Bcf/d from June. EIA forecasts dry natural gas production will average 81.1 Bcf/d in 2018, up by 7.5 Bcf/d from 2017 and establishing a new record high. EIA expects natural gas production will rise again in 2019 to 84.1 Bcf/d. 
  • EIA forecasts that pipeline exports of natural gas, which averaged 6.7 Bcf/d in 2017, will average 7.0 Bcf/d in 2018 and 8.5 Bcf/d in 2019. Increasing natural gas production in the United States and the completion of new pipelines that carry U.S. natural gas to demand centers in Mexico contribute to the expected increase. In June, two new pipelines in Mexico were placed in service that will distribute natural gas from the United States to destinations in Mexico. In addition, EIA forecasts exports of liquefied natural gas (LNG) rise from 1.9 Bcf/d in 2017 to 3.0 Bcf/d in 2018 and to 5.1 Bcf/d in 2019. This growth contributes to U.S. net exports of natural gas averaging 2.0 Bcf/d in 2018 and 5.4 Bcf/d in 2019, compared with 0.3 Bcf/d in 2017. 
  • EIA expects Henry Hub natural gas spot prices to average $2.96/million British thermal units (MMBtu) in 2018 and $3.10/MMBtu in 2019. NYMEX futures and options contract values for November 2018 delivery that traded during the five-day period ending August 2, 2018, suggest a range of $2.33/MMBtu to $3.48/MMBtu encompasses the market expectation for November Henry Hub natural gas prices at the 95% confidence level. 
By WxFollower - Aug. 10, 2018, 12:39 p.m.
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 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.

By metmike - Aug. 10, 2018, 1:18 p.m.
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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 

By WxFollower - Aug. 10, 2018, 4:06 p.m.
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 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




By metmike - Aug. 10, 2018, 10:33 p.m.
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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.