For the weather that affects residential heating demand and natural gas prices, go here:
https://www.marketforum.com/forum/topic/21405/
From Natural Gas Intelligence earlier this today:
Higher Confidence of Shift to Cold in Late January; Natural Gas Futures Called Higher
EIA storage from yesterday: -91 BCF. The market spiked higher briefly, it must have been a bit bullish vs expectations. Last years drawdown was massive, so we have really closed the gap with 2018 storage.......only down 214 bcf. Just a few weeks ago it was triple that deficit.
| Working gas in underground storage, Lower 48 states Summary textCSVJSN | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historical Comparisons | |||||||||||||||||||||||||
| Stocks billion cubic feet (Bcf) | Year ago (01/04/18) | 5-year average (2014-18) | |||||||||||||||||||||||
| Region | 01/04/19 | 12/28/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
| East | 651 | 661 | -10 | -10 | 675 | -3.6 | 720 | -9.6 | |||||||||||||||||
| Midwest | 763 | 798 | -35 | -35 | 792 | -3.7 | 835 | -8.6 | |||||||||||||||||
| Mountain | 132 | C | 147 | -15 | -11 | C | 169 | -21.9 | 173 | -23.7 | |||||||||||||||
| Pacific | 204 | 220 | -16 | -16 | 253 | -19.4 | 279 | -26.9 | |||||||||||||||||
| South Central | 865 | 878 | -13 | -13 | 929 | -6.9 | 1,070 | -19.2 | |||||||||||||||||
| Salt | 302 | 296 | 6 | 6 | 235 | 28.5 | 303 | -0.3 | |||||||||||||||||
| Nonsalt | 563 | 582 | -19 | -19 | 694 | -18.9 | 766 | -26.5 | |||||||||||||||||
| Total | 2,614 | C | 2,705 | -91 | -87 | C | 2,818 | -7.2 | 3,078 | -15.1 | |||||||||||||||
C=Reclassification. Reclassifications from working gas to base gas resulted in decreased working gas stocks of approximately 4 Bcf in the Mountain region for the week ending January 4, 2019. The implied flow for the week is a decrease of 87 Bcf to Lower 48 working gas stocks. (See Notes and Definitions for more information on "implied flow.") | |||||||||||||||||||||||||
These were the temperatures during the 7 day period for yesterday's EIA report...........extreme warmth in the Southeast/East.
Actual number-91 bcf, -87 bcf implied for ng with 4 bcf reclassified as base gas to keep minimum pressure in the pipelines.
The updated graph below really shows this amazing storage catching up stat. There is no longer the risk of getting to extremely low storage levels at the end of the heating season............regardless of how cold we get.
Previous natural gas posts this week:
By WxFollower - Jan. 7, 2019, 5:25 p.m.
It is refreshing to me to see the market not being panicked anymore with the extra high spec volumes making it go so wacky up, down, up, etc. There's still plenty of volatility for opportunities/risks, but not the bat-shoot crazy volatility of Nov and Dec that was ridiculously out of control thanks largely to big entities and their attendant algos. It was plain insane. Hopefully that craziness stays away.
+++++++++++++++++++++++++++
By metmike - Jan. 8, 2019, 1:38 a.m.
Agree Larry!
It was the most volatile ever.
Margin requirements were raised to something like 3 times where they were early in the Fall.
+++++++++++++++++++++++++++++++++++++++++
By metmike - Jan. 8, 2019, 1:41 a.m.
From Natural Gas Intelligence, closing comments at the end of Monday's trading:
"A natural gas futures market left waiting for convincing signs of a return to more impressive winter heating demand sold off Monday. In the spot market, recent weakness continued as forecasters noted comfortable conditions for much of the Lower 48 to start the work week; the NGI Spot Gas National Avg. slid 3.5 cents to $2.665/MMBtu.
Futures bulls had managed to reclaim the $3 mark on Friday but couldn’t hold it for long. The February Nymex contract gapped lower over the weekend and, after climbing as high as $2.994 just before lunchtime on the East Coast Monday, eventually settled at $2.944, off 10.0 cents from Friday. The March contract settled 5.8 cents lower at $2.847.
Monday’s selling came despite some colder trends popping up in recent weather data, according to NatGasWeather. The forecaster noted systems expected to push into the East beginning Thursday through Jan. 15."
++++++++++++++++++++
By metmike - Jan. 8, 2019, 1:46 a.m.
The 0z GFS and Canadian model products came out a bit colder which is supporting NG a bit here.
The European model 762 hour update had a couple of very frigid blasts late this month into early February which help set up the initial support in early evening trading
++++++++++++++++++++++++++++++++++++++++++++++
By tjc - Jan. 9, 2019, 4:43 p.m.
I 'liked' the resiliency of NG today.
Bought a 300 call at/near low. Trying for a 310.
When 'warm' weather wont produce new lows, something says a rally is (over)due!
Time will tell.
+++++++++++++++++++++++++++++++
By WxFollower - Jan. 9, 2019, 6:35 p.m.
Tjc,
With the near term starting today already significantly colder than the last couple of weeks overall and with the amount of intense cold showing up on model consensus to start in about a week with no clear end to the new cold pattern in sight, it is a whole new ballgame with NG. Yes, the threat of major shortages and a return of prices to anything near the high $4 gas has pretty much gone thanks to the mild last 3 weeks. (I already stated that I’m glad because the market was way out of control.) However, that doesn’t mean that NG can’t still rise rather substantially from the current low level near $3. This tells me that there will be plenty of opportunity for your $3.00 call to go well into the money over the next 2 weeks (assuming the late month cold doesn’t fade from the models).
Many El Niño winters have had their cold mote concentrated from this point forward and the US can still have widespread intense cold into the first half of March. That’s still another 9 weeks out in time. A heck of a lot of NG could end up being used during that time. Whereas I no longer think there will be any major shortages, a 3/31 storage down to near 1,000 bcf or even a little lower can’t at all be ruled out yet.