Closing comments from Natural Gas Intelligence on Friday:
July Natural Gas Fizzles at Signs of Cooler Weather; Spot Gas Falls on Soft Weekend Demand
"What goes up must come down was the theme for Friday trading action as July natural gas prices quickly put the brakes on a heat-induced rally as weather outlooks began hinting of cooler weather ahead. The Nymex July natural gas futures contract traded in a less than 7-cent range on Friday, hitting its $2.991 peak early in the session and then trading closer to its $2.926 low end for the last hour until settling at $2.945, down 3 cents on the day."
Last weeks EIA storage data:
| Working gas in underground storage, Lower 48 states Summary textCSVJSN | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historical Comparisons | |||||||||||||||||||||||||
| Stocks billion cubic feet (Bcf) | Year ago (06/15/17) | 5-year average (2013-17) | |||||||||||||||||||||||
| Region | 06/15/18 | 06/08/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
| East | 406 | 377 | 29 | 29 | 510 | -20.4 | 518 | -21.6 | |||||||||||||||||
| Midwest | 401 | 372 | 29 | 29 | 653 | -38.6 | 560 | -28.4 | |||||||||||||||||
| Mountain | 127 | 125 | 2 | 2 | 181 | -29.8 | 155 | -18.1 | |||||||||||||||||
| Pacific | 246 | 239 | 7 | 7 | 280 | -12.1 | 294 | -16.3 | |||||||||||||||||
| South Central | 824 | 800 | 24 | 24 | 1,137 | -27.5 | 976 | -15.6 | |||||||||||||||||
| Salt | 258 | 252 | 6 | 6 | 344 | -25.0 | 289 | -10.7 | |||||||||||||||||
| Nonsalt | 566 | 547 | 19 | 19 | 793 | -28.6 | 687 | -17.6 | |||||||||||||||||
| Total | 2,004 | 1,913 | 91 | 91 | 2,761 | -27.4 | 2,503 | -19.9 | |||||||||||||||||
The period below, ended last Friday was used for the EIA number. That's a pretty big (bearish #) injection considering the amount of heat we experienced. ..........though the intense heat was not in the high population centers of the East, Southeast and Midwest.
The period below and temperatures will be used for the next weekly EIA number released this Thursday at 9:30am CDT:
WxFollowers comprehensive analysis of the last weeks EIA number compared to previous years:
By WxFollower - June 21, 2018, 6:29 p.m.
"On a CDD equivalent basis at this time of year, a +84 would be:
- ~20-25 more bearish than 2017 and 2016, both of which had far more storage
- pretty comparable to 2015 and 2013
- ~20-25 more bullish than 2014, which at the time was having a very long string of 100+ injections
Based on the above, I'd call a +84 ~4-5 bcf looser than the average supply/demand balance of the last 5 years near the same time of year (late spring/early summer). Assuming about the same # of CDDs/HDDs for the next 21 weeks as the average CDDs/HDDs of the last 5 years and considering the current 507 bcf deficit to the 5 year average, the next 21 weeks will need to average 24 bcf/week larger than the 5 year average to get 11/2/18 storage to the 5 year average. So, the current supply/demand balance is nowhere near that."
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June 22, 2018 below:
TODAY'S UPDATE: The actual was +91 rather than +84. Mike win this week with his +87 vs my +86. Congrats!
Now, I'm going to take what I wrote yesterday in relation to the average DJ guess of +84 and modify it to reflect on a +91 instead:
On a CDD equivalent basis at this time of year, the +91 is:
- Around 27-32 more bearish than 2017 and 2016, both of which had far more storage
- Around 7 more bearish than 2015 and 2013
- Around 13-18 more bullish than 2014, which at the time was having a very long string of 100+ injections
Based on the above, I'm calling the +91 about 11-12 bcf looser than the average supply/demand balance of the last 5 years near the same time of year (late spring/early summer).
With the bearish +91, the deficit vs the 5 year average shrunk slightly from 507 to 499. There are now 20 weeks to get to 11/2/18. Considering the current 499 deficit to the 5 year average, the next 20 weeks will need to average 25 bcf/week larger than the 5 year average to get 11/2/18 storage to the 5 year average. So, assuming near the 5 year average for weather, the current supply/demand balance, even just based on today's bearish report, alone, is still nowhere near that as 11/2/18 would come in near 270 lower than the 5 year average or near 3,559. That would actually be slightly lower than the 5 year minimum of 3,582.