I agree with that Jim!

The market had a knee jerk, spike lower immediately after the release but it couldn't stay down. I think the colder week 3-4 part of the forecast are bullish today.

November Natural gas expires next Monday...........2 trading days away.

For the weather that affects residential heating demand and natural gas prices, go here:

https://www.marketforum.com/forum/topic/15889/

Storage is Very Low for this time of year!!

Storage is below the  bottom of the previous 5 year range and still around 600 bcf below last year at this time!

This is why the temperature forecast matters....in  the Summer/cooling season and now in the early part of the key Winter/heating season.

                EIA injection was +58 bcf but with 5 bcf reclassified, it was actually 63 bcf. This seems pretty bearish to me.                                                                                                                                                                                                  

Here's the temperature map for this last EIA reporting period.

Huge cold anomalies and residential heating demand.  

http://www.cpc.ncep.noaa.gov/products/tanal/temp_analyses.php

Natural Gas price charts

We finally broke out above $3!  The weather will need to be cold in November to stay above $3.

A lot of volatility with the low storage. Prices have been gyrating up and down with the latest weather forecast.

Monday forecast was milder than the previous one the market had at the end of last week, Tuesday forecast was colder. Wednesday forecast not much change. Thursdays forecast is colder in weeks 3-4.

 Seasonals turn strongly negative here.......if the extended forecasts turn mild, look out below.........but low storage +very cold = higher price potential.

Natural gas 3 months

Naturalgas 1 year below

Naturalgas 5 years below

Naturalgas10years below

Mike  said: “The market had a knee jerk, spike lower immediately after the release but it couldn't stay down. I think the colder week 3-4 part of the forecast are bullish today.”

—————————————————

 Mike,

 I respectfully disagree. Here’s why: the latest CFSv2 run, the 6Z run, is actually mild dominated in weeks 3-4 overall. The only recent run that was cool dominated was yesterday’s 12Z. If you look at your latest CFS map, it actually says the run is from 10/24, not 10/25.

"If you look at your latest CFS map, it actually says the run is from 10/24, not 10/25."

It always has the previous days date on the site that I use:

http://origin.cpc.ncep.noaa.gov/products/people/mchen/CFSv2FCST/weekly/

Do you have a different link Larry?

Mike, 

 My source is pay. So, I can't provide a link.

 The CFSv2 runs 4 times a day. And they flip like crazy from run to run.  I know we have disagreements on the influence it has on NG. But one thing I assume we agree on is that one of the runs from the prior day will no have no detectable influence on the next day. Now that I can guarantee!

Larry,

I am paying for Accu weather products that include alot of European model stuff and CFS model updates but they don't include the CFS update every 6 hours for weeks 3 and 4. 

What source are you using?

Natural Gas Intelligence closing comments:

Debatable weather outlooks for November ruled the natural gas market Thursday as a bearish storage injection wasn’t enough to stop a rally for Nymex futures. The prompt month settled 3.6 cents higher at $3.202, while December rose 2.9 cents to $3.256 and the winter moved up 2.3 cents to $3.198.

Spot gas prices, however, finally pulled back after several days of gains. Interestingly, the decline came as cooler-than-normal conditions were expected to linger over the eastern half of the United States before another reinforcing cold shot expected to arrive during the weekend. Led by steep declines in the Northeast and Rockies, the NGI National Spot Gas Avg. fell 15.5 cents to $3.22.

Just as production growth was the talk for the much of the summer, weather has ruled the roost throughout October as unseasonably chilly weather and dramatic shifts in weather models for November have led to increased volatility in Nymex futures, particularly for the winter months.

Midday outlooks indicated some milder weather could be around the corner. The Global Forecast System data was milder trending for this weekend, but then notably colder Nov. 3-5 as it reflected a stronger cool shot into the central United States and Midwest, which the overnight European model also showed, according to NatGasWeather.

The pattern is still mostly mild Nov. 6-9 in most of the data, but the cooler central United States trend Nov. 2-5 will make milder days before and after less impactful, the forecaster said. “The focus remains on how long this milder Nov. 6-9 pattern will last, with the data still suggesting around Nov. 12-13 before stronger cold blasts return,” the firm said.

Thursday’s market reaction was revealing given the Energy Information Administration’s (EIA) bearish storage data, NatGasWeather said. The EIA reported a 58 Bcf injection into storage inventories for the week ending Oct. 19, although the implied flow was an even greater 63 Bcf build due to a reclassification of 5 Bcf that decreased working gas in South Central non-salt gas stocks.

“Though stockpiles were decreased by 5 Bcf in the revision, the net implied flow of 63 Bcf is incredibly loose and indicates a market far looser than even we had expected,” Bespoke Weather Services chief meteorologist Jacob Meisel said.

Wood Mackenzie analyst Gabe Harris, however, said that any build that is below the five-year injection with a 600 Bcf storage deficit heading into November “is pretty supportive.” Last year, 63 Bcf was injected into storage, while the five-year average injection is 77 Bcf.

“I get excited about the low numbers and possibility of shortages in February as anyone”, but the last 10 days of big weather-adjusted injections “makes me very skittish. Production seems bigly,” Harris said Thursday on Enelyst, an energy-focused chat service hosted by The Desk.

Also Thursday, the EIA said that starting with the Weekly Natural Gas Storage Report (WNGSR) release on Nov. 15, it would include a tab showing the net change for each report week to the WNGSR history file.

Working gas in storage as of Oct. 19 was 3,095 Bcf, 606 Bcf less than last year at this time and 624 Bcf below the five-year average of 3,719 Bcf.

Salt storage operators have been hustling to refill inventories ahead of the peak winter season, and market observers said continued buying in the weeks ahead should keep some support for prices, whereas any sustained cold could spark a rally.

With the November contract expiring soon, however, there could be potential for “selling for a day or two to allow the new front-month contract to better settle into the recent front-month trading range of $3.10-$3.35,” NatGasWeather said.

That won’t be necessary, however, if weather data were to trend any colder during the first or second week of November, it said.

Spot Gas Plummets Despite Approaching Nor’easter

Spot gas prices were lower at most pricing locations across the United States despite some chilly weather in store for the eastern half of the country. Cool weather remained on tap for Friday, while reinforcing cool shots were expected to follow across these same regions Saturday and again early next week, according to NatGasWeather. Perhaps the reason for the decline in prices was that the latest weather models indicated the cold fronts would not be nearly as chilly as recent weather systems that have hit the region.

Still, in preparation for the storm, New York utility Con Edison said it has secured more than 130 additional utility contractors skilled at restoring power lines and clearing roads blocked by fallen trees and wires.

Northeast spot gas prices plunged as much as 77.5 cents at Algonquin Citygate, which dropped to $3.43 as demand in the New England region was expected to fall. This comes after regional demand Wednesday totaled 3.12 Bcf/d, a 450 MMcf/d day/day increase and the third highest demand day this month, according to Genscape Inc. Transco Zone 6 NY dropped 16.5 cents to $3.32.

Per Mike per NGI:

“The focus remains on how long this milder Nov. 6-9 pattern will last, with the data still suggesting around Nov. 12-13 before stronger cold blasts return,” the firm said.

—————————

Mike,

I use Radiant. They have the 4 times a day CFSv2 runs, which I honestly hardly ever check because I usually don’t find them to have enough value. Like I said, they often flip from run to run. The ones out through late morning were not even cold in weeks 3+. 

 Here are my thoughts with all due respect:

1. Just because NGI says something doesn’t mean they’re right or that the NG market is thinking the same way. I have no idea why they mentioned cold coming in after November 13. We don’t know if it is based on some CFS run, the MJO, analog years, or something else. Regardless, you and I both know that forecasts in week 3 are very flimsy at best, much less in week 4.

2. As mentioned, the CFSv2 maps shown in your wx threads for weeks 3-4  aren’t even from the same day and can’t possibly be significant market influences. If you continue to post them, I hope you add that they are from the day before and that several runs have been run since.

Larry,

I'm extraordinarily grateful to you for pointing this out about the CFS model weeks 3-4 maps not being the latest ones available. I didn't know that.

1.  I only post stuff that I consider to be the latest version of that particular model run which the market pays attention to.

2. Having the latest CFS run will also be advantageous to my own trading. 

" Just because NGI says something doesn’t mean they’re right or that the NG market is thinking the same way. I have no idea why they mentioned cold coming in after November 13. We don’t know if it is based on some CFS run, the MJO, analog years, or something else. Regardless, you and I both know that forecasts in week 3 are very flimsy at best, much less in week 4."

Yes, the forecast for that period does not display much skill and the NGI summary doesn't always get it right. However, I'm surprised that you are so underestimating how much the market trades that time frame. This is why I'm especially grateful to you for pointing out my old maps and will work on finding a source that gets the latest ones. 

From Natural Gas Intelligence comments earlier this week(I don't have all of them) but  over half of the ones that I copied on the forum under the natural gas thread, commented on the period beyond 2 weeks as a key factor for prices on that day. 

From Monday morning:

Long-Range Warm Risks Seen as November Natural Gas Called Sharply Lower

++++

From Tuesday close:

"Even with warmer risks in the latest weather models, cold shots that could continue well into November led to a more than 10-cent swing in prompt-month natural gas prices on Tuesday."

++++++++++++++

From Wednesday morning:                  

   Obviously the market is looking beyond week 2 weather based on this. (the 2nd week of November was week 3).

"Milder Temps Seen by Second Week of November as Natural Gas Futures Called Lower"

From Thursday:

The one that was just noted.

Hey Mike, again with all due respect:

 1. How do we know when NGI says the market is focusing on week 3+ on a particular day that the market really is focusing on week 3+ then? There is no spokesman for the market. The market is highly fractured, especially these days. You sure put a lot of trust in them for some reason. How did you find NGI and why do you choose to use them as THE NG market authority? I see this one guy who writes most of their articles (his pic is at the bottom). Who is this guy? How do we know he doesn’t have a position and is talking his book?

2. When the market really is focusing on weeks 3+, upon exactly what are they basing weeks 3+ on? For weeks 1-2, we have the semireliable consensus of the GFS, Euro, and Canadian suites. There’s something to grab hold of for weeks 1-2. They typically don’t jump around too wildly from run to run even though especially late week 2 is already in semi-flimsy land. But then when you get past week 2, what do we have to grab hold of to feel enough confidence to push us into deciding on going short vs long? The very wild CFSv2? The MJO? Analogs? Indices? Something else?

 My analogy is that week 1 is the part of a fence with solid posts encased in concrete. Week 2 is the next part that is a bit further away that has posts that are starting to rot out some but are still pretty secure. Week 3 has posts that are heavily rotted at the base while week 4+ has posts that have completely broken at the base. The parts of the fence representing week 1 and even week 2 to a lesser extent can be grabbed without worrying about the fence falling. The parts of the fence represented by weeks 3+ go out as far out as the eye can see. But if you try to grab it there, that very long part of the fence will likely fall. It is my strong feeling that the market primarily chooses to grab onto the first two sturdier sections even though the remaining sections go much further out.