Residential cooling demand via electricity generated by burning natural gas, is increasing now seasonally and will be the most important market trading item with potential for big changes because of changes in the weather forecast(cooling degree days):
Sunday Weather: Tenacious Heat Ridge in the Southeast this week rules
Monday Weather: Heat ridge this week but changes down the road.........maybe
Tuesday Weather: Heat ridge breaks down week 2. Pattern change.......turning less wet in week 2!
Wednesday Weather: Heat ridge obliterated in week 2............pattern change. Less extreme rains but still wet in week 2 with active northwest flow?
Thursday Weather: Heat ridge fizzle out week 2(less heat there) with pattern change and big ? on temps elsewhere.
Friday Weather: Heat ridge still looks to break down by late next week.
Previous weekly discussions on natural gas here(dang, this is getting to be long list)
Working gas in storage was 1,653 Bcf as of Friday, May 10, 2019, according to EIA estimates. This represents a net increase of 106 Bcf from the previous week. Stocks were 130 Bcf higher than last year at this time and 286 Bcf below the five-year average of 1,939 Bcf. At 1,653 Bcf, total working gas is within the five-year historical range.
For information on sampling error in this report, see Estimated Measures of Sampling Variability table below.
Latest Release May 16, 2019 Actual106B Forecast 104B Previous 85B
|May 23, 2019||10:30||112B||106B|
|May 16, 2019||10:30||106B||104B||85B|
|May 09, 2019||10:30||85B||87B||123B|
|May 02, 2019||10:30||123B||92B|
|Apr 25, 2019||10:30||92B||91B||92B|
|Apr 18, 2019||10:30||92B||87B||25B|
for week ending May 10, 2019 | Released: May 16, 2019 at 10:30 a.m. | Next Release: May 23, 2019
|Working gas in underground storage, Lower 48 states Summary textCSVJSN|
billion cubic feet (Bcf)
|Region||05/10/19||05/03/19||net change||implied flow||Bcf||% change||Bcf||% change|
These were the 7 day temperatures that were used for last Thursdays EIA weekly storage report.
Very warm in the East. Very chilly in the Plains, especially N.Plains(where not many people live). However, the injection number was still huge at 100+ bcf.
This is the 7 day period for this next report. Chilly in the Northeast with some unseasonably late HDD's. Very warm Northwest/N.Rockies.
This seasonal price chart below is for 2 decades, ending back in 2009. Not sure on what they use exactly to make their calculations but I've been following seasonal patterns since the early 90's(I paid thousands of dollars in the 90's to get seasonal charts for every commodity updated every 2 years) and this graph does a nice job at capturing the seasonality of natural gas.
This shows that natural gas has a strong historical tendency to go up after mid February to mid June.
The lows in Feb., WERE perfectly timed with a typical, end of Winter low, which is followed by increasing prices over 80% of the time into early Spring.
However, this year has been a noted exception/aberration. Fundamentals are very bearish........note the price stayed fairly low even though storage was much less than the 5 year average.....because the market felt very comfortable...... and has been projecting additional storage gains from supplies gushing in......and the market was right.
These natural gas price charts showed a typical seasonal, double bottom in February............which we violated with gusto last month as we spiked to new lows from huge storage injections ahead..
Record late season withdrawals last April......2018 have only made the big injections that much more bearish on the year to year comparisions. So we have experienced something that's extraordinarily rare in the month of April-new lows(maybe has happened only once during the last 2 decades).
We also erased the long lived storage deficit vs the previous year and turned it into a surplus(but still well below the 5 year average)
As we head into the 4th week of May , you can see the nice bounce on the charts below from expectations of the intense heat in the Southeast, causing some record cooling demand for May in that region. The market will be reacting to changes in the cooling degree day forecasts this week, thru the rest of the Summer.
NG 7 days
Natural gas 3 months below
Natural Gas Intelligence after the close Monday:
Further demand gains in the weather outlook and reports of supply disruptions helped inspire a natural gas futures rally to open the work week Monday. In the spot market, hotter temperatures supported Southeast gains, while price moves were mixed in the West; the NGI Spot Gas National Avg. added 6.0 cents to $2.125/MMBtu.
metmike: Note how low that spot prices have been..............way under the futures. If we have a cool Summer, one would think that we will see new contract lows for natural gas futures.
Natural Gas Intelligence Tuesday Morning:
With the latest forecasts still showing a bearish pattern for the start of June, natural gas futures were trading several cents lower early Tuesday. The June Nymex futures contract was down 3.2 cents to $2.641/MMBtu shortly after 8:30 a.m. ET, reversing off of the prior session’s 4.2-cent rally.
Natural Gas Intelligence closing comments Tuesday...look how low cash prices are!
After a drop in production helped rally prices to start the work week, natural gas futures reversed sharply Tuesday amid reports of the interrupted supply coming back online. In the spot market, potential record-setting heat expected in the Southeast by the weekend proved insufficient as a catalyst for higher day-ahead prices; the NGI Spot Gas National Avg.skidded 3.5 cents to $2.090/MMBtu.
NGI Wednesday after the close:
A less than impressive forecast for early June and expectations for another triple-digit storage injection created an opening for bears to extend a recent sell-off in the natural gas futures market Wednesday. In the spot market, sweltering conditions in the Southeast couldn’t stave off widespread discounts; the NGI Spot Gas National Avg. fell 1.0 cent to $2.080/MMBtu
9:30 am: EIA +100 bcf slightly bullish
The Energy Information Administration (EIA) on Thursday reported a 100 Bcf weekly injection into U.S. natural gas stocks, a figure on the low side...
|Working gas in underground storage, Lower 48 states Summary text CSV JSN|
billion cubic feet (Bcf)
|Region||05/17/19||05/10/19||net change||implied flow||Bcf||% change||Bcf||% change|
Closing comments from Natural Gas Intelligence:
A weekly inventory build on the low side of estimates and a warmer-leaning early June outlook supported a small bounce in natural gas futures prices Thursday
I think that it was up some early due to slightly warmer model consensus. Then it fell back. Then once the slightly bullish EIA was released, that was enough in combo with the slightly warmer average of the models to eventually produce new session highs.
That makes good sense Larry.
The 06z GFS ensembles were quite a bit warmer. The market starting going up pretty steady after 6am.
Natural Gas Intelligence Friday Morning: Weather Outlook Mostly Unchanged; Natural Gas Futures Down Early
Natural Gas Intelligence after the close Friday:
The natural gas futures market turned in a quiet day of trading Friday as the latest readings on fundamentals didn’t offer much to excite traders and peel them away from their holiday plans. In the spot market, pipeline maintenance drove record lows in the Midcontinent and sent stopped-up West Texas deep into the red; the NGI Spot Gas National Avg. dropped 27.0 cents to $1.805/MMBtu