NG Injection
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Started by Jim_M - Sept. 27, 2018, 10:34 a.m.

B U L L I S H 

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By Jim_M - Sept. 27, 2018, 11:36 a.m.
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If NG Injections don't average over 50 bcf over the next 3 weeks,  storage won't even hit 3000 bcf let alone the EIA's estimate of 3300+ bcf.    

What a big swing and miss by the EIA.  

By WxFollower - Sept. 27, 2018, 12:19 p.m.
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Jim,

 You’ve been very much on top of the bullish storage for several months. Kudos, sir! Even after taking into account the obliterated record for that EIA week CDDwise, it was still a very bullish report (though there may have been a correction factor of sorts embedded within the number as that is always a possibility especially when considering an individual report that is so far off expectations). With the enormous storage deficit vs both the 5 year average and last year, bears are running scared!

 Keep in mind that barring extreme cold for late October/early November, there are likely still about 6 more injections coming. So, I still expect 3,000 will be surpassed. But now the chance for 3,100 being surpassed is not as high as it was though I still think it is likely to be passed even if not by much. And 3,200’s chance of being exceeded has come down significantly. I’m thinking between 3,100 and 3,200 currently. Even if 3,200 were to be barely exceeded, I’m still thinking how bullish that is vs expectations just 6 months ago and vs the last 15 years.

 

By Jim_M - Sept. 27, 2018, 12:22 p.m.
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Mike was very bullish gas a year or two ago.  Due to all the coal plants closing.  I read in the last day or two that a couple of nuclear electric plants have closed as well.  Yes, supply is booming, but demand is sucking it up and more.  

With the weather extremes in the US over the next 2 weeks, this is getting interesting.  

By Jim_M - Sept. 27, 2018, 12:22 p.m.
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Mike was very bullish gas a year or two ago.  Due to all the coal plants closing.  I read in the last day or two that a couple of nuclear electric plants have closed as well.  Yes, supply is booming, but demand is sucking it up and more.  

With the weather extremes in the US over the next 2 weeks, this is getting interesting.  

By WxFollower - Sept. 27, 2018, 12:34 p.m.
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 The EIA report released today was based on the CDDs for 9/14-20/2018, a record warm week going back to 1950. It wasn’t just a record warm week. It obliterated the previous record set in 2016 by 9 CDDs!! Per 1981-2010 climate records, the CDDs were at the normal for the week centered way back on August 18th!

 Now, next week’s report will be based on a much cooler week of ~25-27 fewer CDDs with only a pretty modest increase in HDDs. So, expect next week’s number to be much higher than +46.

By WxFollower - Sept. 27, 2018, 1:29 p.m.
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 The US NG weighted CDDs for the period May-Sep are going to hit a new record high going back to 1950 and it isn’t even close! They will come in ~54 CDDs higher than the old record, 2016, and ~64 higher than the old 2nd hottest of 2010! Also, they are ~194 higher than 2017 and ~162 higher than the 5 year average! So, although we came in to May with storage 850 bcf lower than 2017 and 1,200 lower than 2016 (helped by the coldest April in many years), the new record high CDDs of 2018 has played a major part in both the current very large deficit vs the 5 year average and there still being a 700 deficit to 2017 and 800 to 2016 despite a much looser supply/demand balance vs 2017/2016.

 Had 2018 instead had CDDs at the 5 year average, we’d likely be looking at ending storage of 3,500ish instead of 3,150ish and current storage closer to 3,100 meaning deficits vs 2017/2016/5 year average of more like 350/450/250 instead of 700/800/600.

By metmike - Sept. 27, 2018, 1:50 p.m.
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Thanks Jim and Larry, 

Yeah, last week's CDD's were massive. We were at the epicenter of the heat, so I should have been more bullish.......but at least I got our asphalt driveway sealed and cured.......fast, at a time of year when its getting late to do it. 

For weather that affects 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...........and now, to generate residential heating:

https://www.marketforum.com/forum/topic/14010/

By metmike - Sept. 27, 2018, 1:55 p.m.
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Storage is Very Low for this time of year!!


Storage is below the  bottom of the previous 5 year range and also almost 700 bcf below last year at this time!

This is why the temperature forecast matters....in  the Summer/cooling season and Winter/heating season. We had record late season cooling demand last week............by a wide margin! Which caused a dinky injection vs average. 


Working Gas in Underground Storage Compared with Five-Year Range

By metmike - Sept. 27, 2018, 1:59 p.m.
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                                +46 bcf                                                                                              From Natural Gas Intelligence:     EIA NatGas Storage Build Even Leaner Than Expected as Futures Reverse Losses                                 

Working gas in underground storage, Lower 48 states Summary text CSV JSN
  Historical Comparisons
Stocks
billion cubic feet (Bcf)
 Year ago
(09/21/17)
5-year average
(2013-17) 
Region09/21/1809/14/18net changeimplied flow  Bcf% change Bcf% change
East729  709  20  20   846  -13.8  825  -11.6  
Midwest800  770  30  30   960  -16.7  942  -15.1  
Mountain173  170  3  3   216  -19.9  202  -14.4  
Pacific259  255  4  4   306  -15.4  331  -21.8  
South Central807  818  -11  -11   1,129  -28.5  1,090  -26.0  
   Salt173  184  -11  -11   305  -43.3  281  -38.4  
   Nonsalt634  635  -1  -1   824  -23.1  809  -21.6  
Total2,768  2,722  46  46   3,458  -20.0  3,389  -18.3 
By metmike - Sept. 27, 2018, 2 p.m.
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These are the temperatures from last week that occurred during the period used for today's EIA report.

From  earlier this week:

"WOW!  Look at that heat!  Temperatures over 10 degrees above average in the epicenter of the heat anomalies!  The injection is clearly going to be a lower one than the previous one and the 5 year average because of so many CDD's."


http://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20180921.7day.mean.F.gif

By metmike - Sept. 27, 2018, 2:03 p.m.
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Natural gas hit some tough resistance back in August. Even the hottest of the hot forecasts couldn't push us to $3 with very low storage.........but we held support 2 weeks ago and rallied strong last week and Monday of this week.

 

We finally broke out above $3 on Monday. Then spiked back below it on Wednesday as the Oct contract expired. Today's bullish EIA report has us making new highs for the move here on Thursday, well above $3. Time is running out to fill storage before the heating season and the bears are no longer pressing the short side/selling with the confidence they had in the Summer.


Natural gas 3 months
         


Naturalgas 1 year below

Naturalgas 5 years below

                   

Naturalgas10years below                
                   
By patrick - Sept. 27, 2018, 2:40 p.m.
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Mike - could you change the regular message to "weather that affects"?
For the usual meaning - influence or make a difference - affect is the verb and an effect is the noun that results. Sorry - just that I read every gas thread.

September is ending & we've had the furnace on once, for under an hour. The next day was 80 with fog that puddled on the floor when we opened a window. Very odd month,  very good for energy stocks.


By metmike - Sept. 27, 2018, 2:51 p.m.
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Kudos again to Jim for being bullish the last several months.

Not a very good close for the ngv contract and just below the June 18th highs,(30.55) so I will still wild guess that this could have been a double top with that high and today's spike was through that high.

However, this just could have been a test of that previous resistance on the close and  I have a neutral position with no confidence on either side because the weather is usually not powerful enough at this time of year, absent extreme heat like last week to make a huge difference. 

If we get extreme cold at any point in October, I think that we can make new highs as will be the case with other early heating season cold waves being able to spike us much higher.


By WxFollower - Sept. 27, 2018, 4:11 p.m.
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 Today's +46 was a whopping 19 lower than the DJ news survey mean of +65, making it easily the most bullish of the summer and most bullish week since January vs expectations. Moreover, it was the most bullish miss in summer since way back when the week ending 7/21/06 had a -7 vs the DJ survey mean of +23 for a 30 bullish miss!

 Look for next week's report to be much higher than +46 due to much lower CDDs as well as the possibility of next week's report sort of correcting for today's report being the most bullish summer report in 12 years. Regardless, the deficits going into winter are going to be quite large needless to say.

By metmike - Sept. 27, 2018, 4:28 p.m.
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Patrick,

Thanks very much for that correction since it's a mistake that repeats day after day after day. 

Funny thing is that I've had other little snafu's or mistakes like that before that got copied the next day, then the day after that and were there for awhile. Then, suddenly I happen to notice and cringe at knowing it was overlooked for so long.

Glad that you read it.

Please keep the comments coming!

By metmike - Sept. 27, 2018, 7:14 p.m.
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