Previous weekly discussions on natural gas here(dang, this is getting to be long list)

https://www.marketforum.com/forum/topic/31521/

https://www.marketforum.com/forum/topic/31099/

https://www.marketforum.com/forum/topic/30641/

https://www.marketforum.com/forum/topic/30007/

https://www.marketforum.com/forum/topic/29419/

https://www.marketforum.com/forum/topic/28858/

https://www.marketforum.com/forum/topic/28351/

https://www.marketforum.com/forum/topic/27780/

https://www.marketforum.com/forum/topic/27305/

https://www.marketforum.com/forum/topic/26861/

https://www.marketforum.com/forum/topic/26506/

https://www.marketforum.com/forum/topic/26105/

https://www.marketforum.com/forum/topic/25678/

https://www.marketforum.com/forum/topic/25189/

https://www.marketforum.com/forum/topic/24662/

https://www.marketforum.com/forum/topic/24111/

https://www.marketforum.com/forum/topic/23680/

Look for the big injections to continue..........depending on the weather.  We've quickly gone from a deficit vs 2018 to a surplus(first time in a long while). Next up, a surplus vs the 5 year average which will happen  later this year, possibly late Summer if its cool this year.

Summary

Working gas in storage was 1,986 Bcf as of Friday, May 31, 2019, according to EIA estimates. This represents  a net increase of 119 Bcf from the previous week. Stocks were 182 Bcf higher than last year at this time and 240 Bcf below the five-year average of 2,226 Bcf. At 1,986 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. 

Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2014 through 2018. The dashed vertical lines indicate current and year-ago weekly periods.

Jun      06    2019        

      One week after delivering a massively bearish storage injection, the Energy Information Administration reported another.

+119 BCF extremely bearish

       https://www.investing.com/economic-calendar/natural-gas-storage-386                                                                                                                                                                                                                                                                                                           Latest Release  Jun 06, 2019   Actual119B   Forecast111B   Previous114B                                                                                                                                                                                                                                                                                                                                                                                                              

Temperatures for the last report, last Thursday. 

Temperatures used for the next report coming out this Thursday. It's the 7 day period ending last Friday.

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. This years extraordinary, contra seasonal plunge lower has been the result of super duper, huge, injections...records by a wide margin........ that have provided numerous bearish surprises and crushed prices. Cash prices during this period have been below $2 at times.   We are getting close to a time frame when ng seasonals become very negative, from around mid June thru August.

A cool Summer, with currently bearish fundamentals/huge supplies could add to the seasonal pressure. WIdespread, intense heat can give us a good bounce.

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)

Looking at the chart below, you can see the nice bounce during May from expectations of the intense heat in the Southeast, causing some record cooling demand for May in that region.  The bounce from that heat was completely dialed in as we spiked higher on Monday May 20th.  

Less heat coming up and a very bearish EIA number 2  Thursdays in a  row has pushed us to new contract lows. The market will be reacting to changes in the cooling degree day forecasts this week, thru the rest of the Summer. As long as there is no extreme heat in the forecast, natural gas can continue lower.  

NG 7 days

Natural gas 3 months below

Closing comments from Natural Gas Intelligence:

Wounded Natural Gas Bulls Eyeing Recovery After Modest Gain

Monday marked the second consecutive gain for natural gas futures, but market bulls still have their work cut out for them in trying to reach levels seen last July, when prices averaged nearly $2.80.

Tuesday morning: 

Natural Gas Futures Again Slightly Higher at Open

       9:02 AM      

Wounded Natural Gas Bulls Eyeing Recovery After Modest Gain

From Natural Gas Intelligence after the close:

Hotter-Trending Forecasts Fuel Natural Gas Futures; Pipe Maintenance Leaves Cash Mixed

     5:34 PM    

In an extremely quiet session for most of Tuesday, natural gas futures prices rose for a third straight day as weather outlooks began to trend warmer for the latter part of June. However, it wasn’t until midday data trended even hotter that confidence in the forecasts grew, sending the July Nymex up 4.2 cents to settle at $2.399. Gains of 4 cents or more were seen through September, although prices for those contracts remained below $2.40.

Short-Term Energy Outlook

Release Date: June 11, 2019 |             Next Release Date: July 9, 2019

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

Natural gas

• The Henry Hub natural gas spot price averaged $2.64/million British thermal units (MMBtu) in May, almost unchanged from April. EIA expects strong growth in U.S. natural gas production to put downward pressure on prices in 2019. EIA expects Henry Hub natural gas spot prices will average $2.77/MMBtu in 2019, down 38 cents/MMBtu from 2018. EIA expects natural gas prices in 2020 will again average $2.77/MMBtu.
• EIA forecasts that U.S. dry natural gas production will average 90.6 billion cubic feet per day (Bcf/d) in 2019, up 7.2 Bcf/d from 2018. EIA expects natural gas production will continue to grow in 2020, albeit at a slower rate, averaging 91.8 Bcf/d next year.
• U.S. natural gas exports averaged 9.9 Bcf/d in 2018, and EIA forecasts that they will rise by 2.5 Bcf/d in 2019 and by 2.9 Bcf/d in 2020. Rising exports reflect increases in liquefied natural gas exports as new facilities come online. Rising natural gas exports are also the result of an expected increase in pipeline exports to Mexico. 

"EIA estimates that natural gas inventories ended March at 1.2 trillion cubic feet (Tcf), 15% lower than levels from a year earlier and 28% lower than the five-year (2014–18) average. EIA forecasts that natural gas storage injections will outpace the previous five-year average during the 2019 April-through-October injection season and that inventories will reach almost 3.8 Tcf at the end of October, which would be 17% higher than October 2018 levels and about equal to the five-year average."

metmike:  If the massive magnitude of recent injections is an indicator of the rest of the year, unless we have extreme temperatures, it seems unlikely that prices could average $2.77 this year as they project. 

What do you guys think?

I am not very confident in the long range outlooks, especially the 3 to 4 week outlook from the CPC. I know those have low confidence anyway but the 8 to 10 day outlook could have issues. I think there will be cooler air locked up for a while in the Upper Plains. But long range ensembles do not agree, at least in my area. GEFS has us in the Middle 90s the first weekend of summer while the EPS has us in the lower to middle 80s. I see indications heat could be building after ten days over areas that should be favorable in my mind to keep the demand up, Texas, SE, East Coast. It will be interesting to see what the next two injections are before the heat build back. I'm still learning a lot on how the price fluctuates based on injections and temperature so this will be interesting over the next three weeks. I do think the GFS Ensemble is too warm in our area due to our current soil moisture. We usually need a drier soil to push temps over 95°F here. Right now I am short a put and call in August 45 Days out. As long as it stays above 2.193 and below 2.657 I make a little money. If it ends around 2.4 I will do very well. 

As for 2.77, I have a hard time believing we will be there anytime soon but I do think there will be enough pressure from heat to keep it from dropping too much lower, hopefully staying above the 2.193 mark for me :-) . Always love getting the information on this board. Starting to read over the grains now. 

Great thoughts as always Grant!

Agree on the wet soils and how tough it is to sustain heat over them. 

The one year which being the quinnessential exception to that was 1983.

Widespread wet soils into around mid June, then like somebody flipped a switch, the dome of death shifted in and dominated most of the cornbelt during July/August, with brief brakes in the intense heat that almost never featured widespread rain events.

From NGI Wednesday: Natural Gas Futures Treading Water Ahead of Open Despite Hotter Weather Models

From Natural Gas Intelligence after the close on Wednesday:

NatGas Futures Slip as Traders Eye 100 Bcf-Plus Storage Build; Permian Cash Nears Zero

     5:34 PM    

After a brief swing into positive territory, natural gas futures prices on Wednesday ultimately gave back a bit of the previous three days’ worth of gains as traders focused on an expected triple-digit storage build rather than on increasing heat in weather models. The July Nymex gas futures contract settled 1.3 cents lower at $2.386, with similarly small losses seen through the rest of the curve

metmike: It's hard to get real bullish with cash prices in the toilet and these record injections. If we have a cool Summer, we could end the year with a record high in storage above 4 tcf. 

Weekly Natural Gas Storage Report

 for week ending June 7, 2019   |  Released: June 13, 2019 at 10:30 a.m.   |  Next Release: June 20, 2019 

                                                                                                                                                                                                                        +102 BCF slightly Bullish?  (not as bearish as expected?)                                                                                                                                                                                                            NGI:      EIA Reports Low-End, Triple-Digit Natural Gas Storage Build                                                                                                                                                                                                                                                                                                                                                                                         

Summary

Working gas in storage was 2,088 Bcf as of Friday, June 7, 2019, according to EIA estimates. This represents  a net increase of 102 Bcf from the previous week. Stocks were 189 Bcf higher than last year at this time and 230 Bcf below the five-year average of 2,318 Bcf. At 2,088 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. 

From NGI Friday morning: Natural Gas Futures Rebound as Weather Data Point to Hotter Days Ahead

 The 12Z GEFS and EPS were pretty much flat vs their respective 0Z runs in terms of CDDs.

Thanks Larry!

Closing comments Friday from Natural Gas Intelligence:

With Projected Heat Intensifying, Natural Gas Futures Recover Losses; Cash Mixed

     5:36 PM    

In a sign that Thursday’s 6.1-cent decline was a bit overdone, natural gas futures recovered all of those losses -- plus a penny -- on Friday. Driven in part by more supportive long-range weather forecasts, the July Nymex gas futures contract rose 6.2 cents to settle at $2.387. August climbed 5.9 cents to $2.381