Thanks Larry! I agree with that.

Residential cooling demand via electricity generated by burning natural gas, is still 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).

July is usually a weak month for natural gas prices and storage has been making huge gains but we have some major heat on the way that should provide some support.

Saturday Weather:

https://www.marketforum.com/forum/topic/33962/

Sunday Weather: Heat ridge still coming

https://www.marketforum.com/forum/topic/34019/

Monday Weather: US operational model takes out week 2 heat........outlier.

https://www.marketforum.com/forum/topic/34104/

Tuesday Weather: HOT but with a wide spread in solutions, especially on rains. Watching Tropical system Barry.

https://www.marketforum.com/forum/topic/34186/

Wednesday Weather: Hot.......watching Barry the next week:

https://www.marketforum.com/forum/topic/34248/

Thursday Weather: Broken record........heat!

https://www.marketforum.com/forum/topic/34320/

Friday Weather: Hotter overnight

https://www.marketforum.com/forum/topic/34395/

Saturday Weather: Cooler week 2. Barry a bit farther north.

 https://www.marketforum.com/forum/topic/34485/

Sunday Weather: Cooler again week 2. Barry a bit farther north again.

https://www.marketforum.com/forum/topic/34557/

Not surprising to Mike and myself, NG opened pretty strongly: ~6 cents above the last traded price and ~4 cents above the Fri settlement.

Yes but the 18z American model is coming out with much less heat, so the decent gap higher has been filled.

This is probably an outlier but if its on the right track that could have been the highs with a gap and crap/exhaustion gap higher.

Betting the ensembles are not like this.

Mike,

My impression fwiw is that the potential Gulf tropical system is largely responsible for the somewhat less hot 18Z GFS and now it appears the 18Z GEFS, also. Just my take.

 It would appear that the potential tropical system has more bearish implications than bullish since it is not expected to get too strong as of now and is expected to move slowly below and inside the SE US.

Agree Larry but in addition, there's a stronger cold front into the Midwest and Northeast late week 1 and early week 2.

So the cooling is from both ends during that period.

Agree that this cooling is carrying over to the ensemble that is really looking cooler later in week 2 than the operational model along the northern tier.

With ng fundamentals in the toilet and this being July, seasonally the weakest month, I wouldn't want to be long unless we have the widespread, intense heat in the forecasst like we did before this model run.

Actually, I see that the ensemble had already started cooling things in the north during the previous model run in week 2. 

The oz run ensemble, 3 runs ago had really heated up the north in week 2 (from already being pretty warm) but its taken all that back and then some but is still very warm up there and in most of the country where hot is probably a better word. 

I have 2.413 as a key area as that those were the highs back in mid June, that were tested then we went on to make new contract lows until this intense heat showed up.

Technically, one could see that as support now after we've broken out above that level but the thing that really matters is the overnight forecast. If it turns hotter again, we should go higher. If the trend continues cooler, it will be hard for us to keep going higher.

I should note that the late Thursday European model 30 day forecast came out really hot in contrast to all the cool Summer forecasts that have been traded all year.

The way the market traded on Friday, with extremely high volume in algorith type waves, made me think it was the big funds covering some of their huge shorts put on in recent months based on mega bearish fundamentals and cool Summer forecasts...........because the forecasts suddently turned hot and they wanted out. 

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

https://www.marketforum.com/forum/topic/33668/

https://www.marketforum.com/forum/topic/33132/

https://www.marketforum.com/forum/topic/32675/

https://www.marketforum.com/forum/topic/32177/

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/

Intense heat added to the July forecast has given natural gas some life! Even as huge/record injections have resulted in supplies gaining vs last year and previous years.

Summary

Working gas in storage was 2,390 Bcf as of Friday, June 28, 2019, according to EIA estimates. This represents  a net increase of 89 Bcf from the previous week. Stocks were 249 Bcf higher than last year at this time and 152 Bcf below the five-year average of 2,542 Bcf. At 2,390 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. 

Weekly Natural Gas Storage Report-last week

 for week ending June 28, 2019   |  Released: July 3, 2019 at 12:00 p.m.   |  Next Release: July 11, 2019 

                    +89 bcf a bit bearish based on the small spike down after the release.                                                                                                                                                                                                                                                                                                                                                                                                               

                     https://www.investing.com/economic-calendar/natural-gas-storage-386

U.S. Natural Gas Storage

   Latest Release  Jul 03, 2019   Actual  89B    Forecast 85B   Previous 98B

Temperatures for last WEDNESDAY'S report: Warm East, Cool West.

7 day temperatures for this Thursdays report. Much more heat..........lower injection.

The dominant imposing factor for prices this year has been massive, record large injections that have increased supplies faster than any time in history and crushed prices.

Looking at the chart below, you can see small a bounce during May from expectations of the intense heat in the Southeast, causing some record cooling demand for May in that region.

Last week featured increasing heat, so natural got a huge lift, especially Friday.  The market will be reacting to changes in the cooling degree day forecasts this week, thru the rest of the Summer.  We started the week under pressure from cooler week 2 forecasts on the US model. As long as there is no extreme heat in the forecast, natural gas can continue lower but widespread heat will give us bounces and can cause new highs for this move.

NG 7 days

Natural gas 3 months below

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 now in a time frame when ng seasonals become very negative, from mid/late 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 and resulted in a huge rally to end last week.

Natural Gas Intelligence from early Monday Morning:

Big Move Higher for NatGas Futures as Forecasts Show Record-Level July Heat

Natural Gas Intelligence Monday afternoon:

Exceptionally Hot’ Forecast, Strong Production See Natural Gas Futures Test Both Sides of Even

     5:15 PM    

With robust production numbers helping to curb traders’ enthusiasm for a much hotter July outlook, natural gas futures eased lower Monday.

NGI from this morning: Overnight Guidance Slightly Cooler as Forecasters Eye Gulf Coast Storm; Natural Gas Futures Called Lower

I  disagree with the overnight guidance being cooler. I can guess that since the market was lower early on and they had to report the reason......... they made that up.

Closing comments from NGI: 

Tug-of-War’ for Natural Gas Prices as Market Mulls Cooling Demand, Production

     5:25 PM    

With traders continuing to weigh strong production against the prospect of widespread heat lifting cooling demand in the weeks ahead, natural gas futures rebounded modestly Tuesday. In the spot market, gains in the Northeast and a price retreat in the Rockies and California headlined a day of mixed moves; the NGI Spot Gas National Avg. added 4.0 cents to $2.080/MMBtu

The last operational run of the US model was about as hot as it can get in week 2, with its ensembles also the hottest run yet for that period......but natural gas is actually a couple ticks lower. 

I think Larry was on to this on Sunday Night..............the remnants of Barry later this week into early next week......maybe the middle of next week? will provide cooler temps along its path and be a bearish influence. 

NGI Wednesday morning:

       9:20 AM      

Traders Eyeing Potential TS Barry in GOM; Natural Gas Futures Called Higher

                                                                                                                                                                 +81 BFC bearish but the upcoming heat matters the most.                                                                                                                                                                                                                                             

Summary

Working gas in storage was 2,471 Bcf as of Friday, July 5, 2019, according to EIA estimates. This represents  a net increase of 81 Bcf from the previous week. Stocks were 275 Bcf higher than last year at this time and 142 Bcf below the five-year average of 2,613 Bcf. At 2,471 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 Natural Gas Intelligence: NatGas Futures Market Shrugs Off Bearish Storage Miss; Analysts Cite Holiday Impacts

    11:20 AM    

The Energy Information Administration (EIA) on Thursday reported an 81 Bcf weekly injection into U.S. natural gas stocks that was on the higher side of estimates, but the futures market took the news in stride.

https://www.investing.com/economic-calendar/natural-gas-storage-386

Latest Release   Jul 11, 2019   Actual81B   Forecast73B    Previous89B

From NGI: NatGas Futures Retreat on Potential Barry Demand Destruction, ‘Unimpressive’ EIA Data

     5:16 PM    

Potential demand destruction from a tropical storm in the Gulf of Mexico (GOM) and a larger-than-expected weekly inventory build helped to pressure natural...

metmike: I disagree very strongly with their assessment. Natural gas was higher until the US model came out MUCH cooler in week 2. 

In fact, the drop in cooling degree days in week 2 on the ensemble was the greatest from an ensemble from one run to the next that I can ever remember seeing.

Not one bit of this was from the tropical system which will be long gone by then but instead from a strong upper level trough in the Northeast and much cooler air from Canada after day 10 affecting the entire eastern half of the country.

Temperatures after day 10 went from much above/hear record to below normal. Incredible change.

You do NOT want to be long natural gas year if temperatures flip to below normal later this month.

This last US ensemble puts back around half the heat from previous runs but is still advertising the pattern morphing to a cooler one after day 10.

If future models continue to show this and that really does define the pattern during the last part of July, the highs are likely in for natural gas.

From NGI Friday morning: NatGas Futures Called Higher as Gulf Coast Braces for TS Barry

As noted yesterday, they stated that Barry cause natural gas prices to go down and now the exact same forecast for Barry is supposedly causing ng prices to be up.

Sorry,  the real reason is that weather models were hotter overnight and that's why we are up(they were cooler yesterday afternoon, at least the US model was MUCH cooler)

NGI after the close on Friday: 

Barry Production Shut-Ins Exceeding LNG Disruptions as Natural Gas Futures Rally

     5:16 PM    

Faced with myriad uncertainties surrounding Tropical Storm Barry’s eventual supply and demand impacts as it approached the Gulf Coast Friday, but with a substantial chunk of production already shut in, natural gas futures traders bid up prices heading into the weekend.

Sat wx updated