If these forecasts stand up, we are going to see $2 before we see $3.  

Thanks much for starting a new ng thread Larry!

Gap lower on the open!!!!

The low on Friday was 2.507 for the Feb ng.

Opened with a massive gap lower, at 2.322 and spiked to 2.265 within seconds.

The previous contract low was 2.393 set on Dec 8th of this year and we gapped way below that.

The high was in that first minute at 2.346.

Having a position over a normal Winter weekend is extremely dangerous(or rewarding).

Add an extra day+ to this holiday weekend and............this is what can happen.

A  change of over $2,000/contract from the early close Thu to the open Sunday Night.

Liquid energies are down too but they can often trade the opposite of weather at this time of year. 

Heating oil is mainly used for fuel in the Northeast/New England. These warm temps mean low heating demand there. 

Liquid energies are actually trying to make a come back here. 

NG's only hope is sharply colder weather........and the trend for many consecutive days is for milder/less HDD's.

Liquid energies, after some modest losses out of the gates, have come back to around unch.

Natural Gas Intelligence to start the short trading week:

January Temperatures Looking ‘Solidly Warm’ as Natural Gas Futures Plummet

Natural gas futures were down sharply in early trading Monday as forecasters highlighted major warming trends from weather models over the holiday weekend showing mild temperatures well into January.  As of around 8:50 a.m. ET, the January Nymex contract had plummeted 26.3 cents to $2.255/MMBtu. February was down 22.8 cents to $2.284. Models over the… 

LNG Strength Offers Hope for Natural Gas Bulls as Futures Pare Losses Early

With natural gas bulls finding solace in strong demand from exports even as winter weather continues to disappoint, futures recovered some of their recent losses in early trading Tuesday.  The January Nymex contract was up 4.5 cents to $2.350/MMBtu at around 8:45 a.m. ET. February was up 5.2 cents to $2.378. The overnight weather data… 

   December 29, 2020

metmike: Jan ng expires today......often the recipe for a spike in prices ---AO and -NAO would usually cause cold temps and this may happen late in week 2. 

NGG needs to get all the way up to 2.504 to fill the massive gap lower from Sunday Night. Today's high was 2.468

January Natural Gas Bounces Sharply Upon Expiration; Cool Blast Boosts Cash

On a day of heightened volatility, the January Nymex natural gas futures contract rebounded sharply ahead of expiration as robust liquefied natural gas (LNG) demand took center stage. Though a full recovery from Monday’s steep sell-off proved difficult, the January contract expired a whopping 16.2 cents higher at $2.467. The February contract, which takes over… 

  By Leticia Gonzales

December 29, 2020

metmike: Even with the big spike higher of +1,000/contract, NGG was unable to close the huge gap lower from Sunday Night and now we are well below it again.

This suggests a bearish, downside breakaway gap.....unless it gets filled which would be a selling exhaustion formation and flip to more bullish.

The EIA will be as usual on Thursday this week.

From Last week:

Weekly Natural Gas Storage Report

 for week ending December 18, 2020   |  Released: December 23, 2020 at 12:00 p.m.   |  Next Release: December 31, 2020 

                                                                                                                                                                                                                                                -152 BEARISH!                                                                                                                     

Summary

Working gas in storage was 3,574 Bcf as of Friday, December 18, 2020, according to EIA estimates. This represents  a net decrease of 152 Bcf from the previous week. Stocks were 278 Bcf higher than last year at this time and 218 Bcf above the five-year average of 3,356 Bcf. At 3,574 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 2015 through 2019. The dashed vertical lines indicate current and year-ago weekly periods.

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

Here are the temperatures for the period from last weeks  report. The drawdown was much larger than the previous one.

Here are the temps for this Thursdays report. The drawdown will not be as big as the last one. Very mild in much of the country, especially in the center and northern tier.

Rig count continues to slowly climb since the lows this Summer, amidst the higher prices. Up another 2 to 83, up from the low of 69. The previous low was 83 back in August 2016.

https://ycharts.com/indicators/us_gas_rotary_rigs

Mike,

 Another reason the draw is projected to be much lower than last week is that this past week ending 9 AM Fri AM had holiday related demand slowdown. The subsequent report will also be reduced by holidays, possibly even more. The one to be released two week from Thu will also have some slowdown though probably not as much.

 By the way, the 0Z GEFS has been stuck on hour 42 for almost 2 hours!

Thanks Larry,

I wasn’t aware of those points.

Weather Outlook ‘Rather Stable’ as Natural Gas Futures Trade Close to Even

 Natural gas futures were trading close to even early Wednesday as the latest forecasts continued to show mild temperatures dominating the Lower 48 through the first half of January. The February Nymex contract was off 0.3 cents to $2.441/MMBtu at around 8:45 a.m. ET. After undergoing a major warm shift over this past weekend, the… 

 metmike: I have never seen the AO AND the NAO this negative with such a mild forecast!(it should get colder)

Some stuff getting "dialed in", is it?

wake up, sleepyheads... New Year's Eve party has started!

ECMWF confirmed bullish weather after 10th

ECMWF-Ensemble added almost 10 HDDs, strong on the back, that's why it's going up

Thanks hay man, I saw that. NG took off near the end of the EE run.

European Weather Model Increases Demand Expectations as Natural Gas Futures Climb

Latest Release   Dec 31, 2020    Actual-114B   Forecast-125B    Previous-152B    

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

U.S. Natural Gas Storage

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending December 25, 2020   |  Released: December 31, 2020 at 10:30 a.m.   |  Next Release: January 7, 2021 

  -1`14 BCF Bearish but the weather is turning more bullish                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Summary

Working gas in storage was 3,460 Bcf as of Friday, December 25, 2020, according to EIA estimates. This represents  a net decrease of 114 Bcf from the previous week. Stocks were 251 Bcf higher than last year at this time and 206 Bcf above the five-year average of 3,254 Bcf. At 3,460 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 2015 through 2019. The dashed vertical lines indicate current and year-ago weekly periods.

EIA’s 114 Bcf Storage Draw Well Below Expectations, but Natural Gas Bears’ Celebrations Cut Short

The huge bearish gap lower from Sunday Night has been closed which puts in a gap and crap selling exhaustion formation.....based on much colder weather guidance the past 12 hours on ALL models now.

Weather models this Sunday will confirm or reject/negate it.

1`2z models were tons colder, including the Canadian model(that was looking fairly mild 12 hours ago).

Especially the EE again, gaining 10 HDD's, pretty bullish change the past 24 hours/last 2 runs.

With the solidly negative AO and NAO, this is making much more sense than how mild the models were earlier this week and I questioned that.

https://www.marketforum.com/forum/topic/63363/#63513

Here's the latest on those indices as of 12/31/20.

This product automatically updates daily, so if you are reading here several days later, todays values will be gone on the daily charts below.

https://www.marketforum.com/forum/topic/15793/

Probably a gap higher on the open.

Late week 2 maps show a pattern change to potentially much colder.

Pretty decent sized gap higher....pretty bullish start to the week.

However, the cold better keep getting more impressive(like it has been the last couple of model runs) because storage is near record highs and the last couple of EIA reports were bearish.

NG reduction of gains last few hours nothing to do with wx and everything to do with equities being sharply down imo. 6Z/12Z GEFS have been colder runs, not the opposite as one might think based on the last few hours.

Thanks Larry,

I agree that has alot to do with it.

Seasonals are strongly down for the front month at this time of year with ample storage...........and we are at the top, which is bearish.

The last 2 EIA reports were solidly bearish.

I think that we must ADD to the cold in order to confidently go higher, not just sustain the cold............and it has looked pretty cold late in week 2 for several days now.

The last GFS Ensemble was +2HDDs vs the previous one but looks the coldest yet at the end of the run.

The previous EE was actually -2HHDs but didnt look AS COLD late.

 Mike,

 Yeah, NG mkt just seems to "want" to go down and is trying its best to ignore the last 2 colder GEFS runs. Not trading on wx the last couple of hours as its PRIMARY influence.

In other words, had the GEFS not been as cold, NG would likely be down further now. IF Euro suite comes in warmer, look for a sig drop from here. If not, it may stabilize or may even bounce back if especially the EPS is colder.

Edit: Dow coming back decently, which may now in combo with the colder 12Z GEFS be helping NG to rise back some.

New edit:

 1. The 12Z EE not only regained what it lost on the 0Z, it also has cross polar flow into Canada just west of Hudson Bay late, upping the ante imo for the chance foe very cold air to subsequently spill into at least the upper Midwest and NE US 1/20+.

2. The Dow has risen back to the highest it has been all afternoon.

These two things are likely helping NG to finally bounce back.

Agree completely with that Larry!

With near record ng in storage to start the year, 2 pretty bearish EIA's, continued COVID, strong negative seasonals for the front month and the weather map below, we're going to need to forecast to get even colder than this to inspire confidence for the bullish case.

Another item too is that when we have ample storage in January, we are approaching the half way point in the heating season and the market carries less risk premium for cold and is less threatened by the same amount of cold earlier in Winter when storage has a chance to be drawn down much lower by a cold Winter.

Now, it means that we could have half of  a cold Winter but storage levels have almost no chance to get low, unless it was near record sustained cold for many consecutive weeks.

Not saying we can't go much higher with extreme cold, just that market moves will be dampened out.

Natural Gas Futures Kick off New Year with Solid Gain; Spot Prices Jump

On the plus side also is the gap higher from last night vs the high Thursday/last week was not filled.

This is a daily and weekly gap higher with the high last week being 2.547 and the low on Monday being 2.568.

This could be a bullish, upside break away gap which would signal much higher prices ahead.

However, if the gap gets filled, that technical signal is negated and it becomes a buying exhaustion formation.....gap and crap..........which suggests a top/buying exhaustion.

When weather model outlooks change greatly from day to day, these technical signals can be very unreliable indicators. They will basically just tell us what the weather maps were showing. 

If the weather forecasts stay consistent and strongly favor one direction........then we get a trend up or trend down in the price that is more reliable.

Thanks, Mike! Always appreciate your input.

18Z GEFS: I think will come in as coldest run yet and appears to include cross polar air coming down into the Midwest headed to NE late. This should be supportive, but as for what NG actually does in the short term? Who knows? Depends on outside markets, mainly equities imo, and other things like the production and export side. 

I see exactly what you're saying on the cross polar flow feeding into the Upper Midwest and it getting colder.

Looks about tied for the coldest on the last 2 runs of the GFSE.

Last night's 0z run had the -15 Deg C  850 mb isotherm in S.Manitoba/S.Ontario at the end of the run.

The last 2 runs have it down to  the US border now, with the -18 Deg C isotherm right behind. 

The source region for that cold should be Siberia because of the cross polar flow which continues south across Canada and feeds into the U.Midwest.

If correct, this makes the NWS extended maps look like they're out to lunch for the late period, where they currently have decent high probabilities of above average temps.

But there is tons of disagreement. A few have the polar vortex or a piece of it displaced very far south(which is not surprising with a pattern like that) but others are actually mild for the same U.Midwest locations.

Natural Gas Futures Extend Rally Early as Forecasts Add Demand Overnight

Natural gas futures pushed higher in early trading Tuesday following gains in projected weather-driven demand from the latest forecasts. Coming off a 4.2-cent gain in the previous session, the February Nymex contract was up 10.3 cents to $2.684/MMBtu at around 8:45 a.m. ET. The American Global Forecast System model added 12 heating degree days (HDD)… 

   January 5, 2021

metmike: Pattern change to much colder impressive the last 24 hours. The 6z GFSE was much milder, -14 HDD's  in a period ahead of the big change to much colder. 

 7 day temps for the EIA this week:

February Natural Gas Futures Soar to Extend New Year Momentum

Natural gas prices spiked Tuesday, extending the gain made a day earlier to jumpstart 2021 trading, as weather models pointed to fresh bouts of cold air over the Midwest and East in the second half of January. The February Nymex gas futures contract jumped 12.1 cents day/day and settled at $2.702/MMBtu. March advanced 11.2 cents… 

metmike: Gap from Sunday looks like upside breakaway gap still. The NWS hand drawn extended maps are still very mild and the 8-14 day looks MUCH milder than most of the models. 

All 0z guidance was milder as one can tell from the sharply lower price.

+++++++++++++++++++++++++++++++

Addition:

Models Back Away from Projected Cold as Natural Gas Futures Retreat

Natural gas futures pared their recent gains in early trading Wednesday as recent weather model runs lowered demand expectations for the next two weeks. After rallying 12.1 cents in the previous session, the February Nymex contract was down 4.4 cents to $2.658/MMBtu at around 8:50 a.m. ET. As of early Wednesday weather models had “backed… 

++++++++++++++++++++++++

metmike: Since then, ng has taken off to new highs. Despite the less cold runs overnight, the pattern change to much colder has not been called off.

In addition to colder 6Z/12Z GEFS, sharply higher Dow has to also be major factor imo in NG rise.

Yes, that must have helped too Larry!

12z GFSE looks a bit less cold too me late in week 2 vs the previous run.   Just 1 solution though.

Euro op was a ton less cold/milder

Asia LNG Prices Skyrocket as Buyers Scramble for Supplies Amid Cold Snap, Power Shortages

Despite Demand Uncertainty, February Natural Gas Futures Keep 2021 Win Streak Alive

Natural gas prices hovered in a narrow range of gains and losses early Wednesday as traders mulled strong demand for U.S. liquefied natural gas (LNG) exports against weakened weather outlooks. But futures held firmly into the green in the afternoon as analysts rolled out forecasts for a substantial withdrawal with Thursday’s government storage report. The… 

   January 6, 2021

Temps were actually on the mild side last week for this time or year and it was a holiday week,  so the withdrawal should not be that big.

Do you have an estimate Larry?

Storage Withdrawal Steep but Shy of Expectations; Muted Market Reaction

The U.S. Energy Information Administration (EIA) reported a withdrawal of 130 Bcf from natural gas storage for the week ended Jan. 1, much steeper than the pull a year earlier but slightly off market expectations. Nymex natural gas futures traded in a narrow range in the wake of the storage release. Ahead of the EIA… 

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending January 1, 2021   |  Released: January 7, 2021 at 10:30 a.m.   |  Next Release: January 14, 2021 

                                                                                                                                                                                                                                                                                                                                                                                                                                                        -130 BCF Bearish again                                                                                                                                                                                                                                                                                                                                                      

Summary

Working gas in storage was 3,330 Bcf as of Friday, January 1, 2021, according to EIA estimates. This represents  a net decrease of 130 Bcf from the previous week. Stocks were 138 Bcf higher than last year at this time and 201 Bcf above the five-year average of 3,129 Bcf. At 3,330 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 2016 through 2020. The dashed vertical lines indicate current and year-ago weekly periods.

12z models were milder(less cold), except for the not widely followed CMC Ensemble

Warm Model Trends See Natural Gas Futures Retreat Early

Thanks, Mike.

 I just created a new NG thread since this has gotten long.