NG week of 7/15/19
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Started by WxFollower - July 14, 2019, 9:09 p.m.

 Fwiw, I have these CDD comparisons for today's 12Z runs vs Fri at 12Z:

 EPS: -3

GEFS: +2

So, averaging out flat vs Fri at 12Z.

By metmike - July 14, 2019, 9:15 p.m.
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Thanks for getting us started Larry!

For those not familiar with those letters., the EPS is the European model Ensemble, the other one is the American model Ensemble. The 2 most important weather model products.

I think that you'll agree with me that those numbers will be plunging for the next week, as hot near term days get replaced by much cooler additional days at the end of the forecast.

If the week 2 forecasts continue to look this much cooler, I would be shocked if natural gas prices are this high next week.  A strong case can be made for the highs to be in right now. 

By metmike - July 14, 2019, 9:22 p.m.
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Residential cooling demand via electricity generated by burning natural gas, is approaching its seasonal peak. It's 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 had some near record cooling demand in the forecast for the past 2 weeks which has lifted natural gas prices..............but the week 2 forecasts have been turning cooler the last couple of days here on Sunday Night. That might put some pressure on natural gas prices this week but there will be near record AC demand going on. 

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

Weather Monday: Pattern for cooler in week 2 continues. A bit more rain in week 2 on some guidance.

Weather Tuesday: Cooler again. More rain too.

Weather Wednesday: Temps about the same as yesterday with MUCH cooler weather coming after this heat breaks over the weekend. How much rain is the huge question not answered.

By metmike - July 14, 2019, 9:24 p.m.
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By metmike - July 14, 2019, 9:26 p.m.
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     Last weeks EIA report                                                                                                                           +81 BFC bearish but the upcoming heat mattered the most.                                                                                                                                                                                                                                             

Working gas in underground storage, Lower 48 states Summary textCSVJSN
  Historical Comparisons
billion cubic feet (Bcf)
 Year ago
5-year average
Region07/05/1906/28/19net changeimplied flow  Bcf% change Bcf% change
East544  526  18  18   477  14.0  561  -3.0  
Midwest597  568  29  29   474  25.9  610  -2.1  
Mountain140  134  6  6   142  -1.4  165  -15.2  
Pacific263  255  8  8   260  1.2  290  -9.3  
South Central927  907  20  20   843  10.0  987  -6.1  
   Salt257  259  -2  -2   239  7.5  283  -9.2  
   Nonsalt669  648  21  21   604  10.8  704  -5.0  
Total2,471  2,390  81  81   2,196  12.5  2,613  -5.4  

Totals may not equal sum of components because of independent rounding.


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. 

 Working Gas in Underground Storage Compared with Five-Year Range

By metmike - July 14, 2019, 9:27 p.m.
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Latest Release   Jul 11, 2019   Actual81B    Forecast73B   Previous   89B


Release DateTimeActualForecastPrevious
Jul 18, 2019 10:30 73B81B
Jul 11, 2019 10:3081B73B89B
Jul 03, 2019 12:0089B85B98B
Jun 27, 2019 10:3098B101B115B
Jun 20, 2019 10:30115B107B102B
Jun 13, 2019 10:30102B109B119B
By metmike - July 14, 2019, 9:31 p.m.
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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.

The last 2 weeks, however featured increasing heat, so natural got a huge lift.  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 some early 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. Widespread heat needs to continue to keep prices up here.

NG 7 days*1&width=450&height=286&startDate=1549311628&endDate=1549916428

Natural gas 3 months below

By metmike - July 14, 2019, 9:34 p.m.
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This seasonal price chart below is for 2 decades, ending back in 2009.

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.

Widespread, intense heat has given us a huge bounce at a time when ng prices normally drop. If the heat ends, ng prices could drop back down to the lows.

Natural Gas Futures (NG) Seasonal Chart

By WxFollower - July 15, 2019, 11:12 a.m.
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 Maxar is forecasting two of the six hottest days since 1950 on a US energy usage weighted cooling degree day basis for 7/19-20:

7/20/19’s 16.43 CDDs would rank 2nd hottest to only 7/22/11’s 16.87

7/19/19’s 15.9 would actually be the hottest day since 7/22/11 though 7/20/19 would then eclipse 7/19/19


By metmike - July 15, 2019, 11:24 a.m.
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Thanks much Larry. That's good info to know.

The market obviously dialed all that in earlier this month when we spike higher as it showed up in the 2 week forecasts.

Now we go lower because the 2 week forecasts are cooling us off:

Natural Gas Intelligence from earlier this morning:

Cooler Weather Trends Weigh on NatGas Futures Early; Barry Impacts Said Bullish

By metmike - July 15, 2019, 11:40 a.m.
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These much above temperatures are coming as we are almost at the seasonal/climatological peak in temperatures, which adds to what is usually around the highest CDD period of the year averaged out.

By metmike - July 15, 2019, 2:07 p.m.
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NG getting pretty volatile here.........the 12z operational  US model was MUCH hotter(less cooling week 2) but not the ensemble.

By metmike - July 15, 2019, 7:38 p.m.
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Natural Gas Intelligence after the close on Monday:

Milder Forecast Sends NatGas Futures Lower; Cash Mixed Despite Near-Term Heat

     5:19 PM    

With forecasts showing milder temperatures later this month, and with the market assessing former Tropical Storm Barry’s full impact on the fundamentals, natural gas futures prices sold off Monday. In the spot market, Gulf Coast and Southeast locations saw mostly discounts as what remained of Barry moved inland; the NGI Spot Gas National Avg. eased 2.0 cents to $2.260/MMBtu. 

By metmike - July 16, 2019, 12:31 p.m.
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From Natural Gas Intelligence Tuesday Morning:

Natural Gas Futures Sell Off Early as Forecasts Show Heat Fading

By metmike - July 17, 2019, 12:18 a.m.
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Natural Gas Intelligence closing comments Tuesday: 

Natural Gas Futures Hit Reverse on Lack of Sustained Heat


Faced with further signs that strong heat this week won’t have staying power, natural gas bulls acquiesced to sharp discounts in the futures market Wednesday. Meanwhile, a weak spot market response to near-term forecasts showing some of the hottest conditions of the summer so far reinforced the bearish sentiment on the day; the NGI Spot Gas National Avg. slid 10.0 cents to $2.160/MMBtu.

By metmike - July 17, 2019, 12:03 p.m.
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By metmike - July 17, 2019, 6:10 p.m.
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NGI after the close on Wednesday:

No Major Changes to Latest Forecasts as Natural Gas Futures Stall

     5:25 PM    

Natural gas futures paused for a breather Wednesday as the market continued to await any sign of the next bullish weather catalyst. Meanwhile, the spot market displayed indifference to the “dangerous heat” building over the populated Midwest and East regions to close out the week; the NGI Spot Gas National Avg. added 0.5 cents to $2.165/MMBtu.