We gapped lower on the open from temperatures even cooler than Friday's forecast, especially on the GFS products out 2 weeks but also on the other models during the first 10 days.
The low on Friday for NGQ was 2.756. The high this evening has been 2.741.
For weather that effects the natural gas market(Cooling Degree Days in the Summer help gauge residential natural gas use because natural gas is used to generate electricity for air conditioning:
for week ending July 13, 2018 | Released: July 19, 2018 at 10:30 a.m. | Next Release: July 26, 2018
| Working gas in underground storage, Lower 48 states Summary textCSVJSN | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historical Comparisons | |||||||||||||||||||||||||
| Stocks billion cubic feet (Bcf) | Year ago (07/13/17) | 5-year average (2013-17) | |||||||||||||||||||||||
| Region | 07/13/18 | 07/06/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
| East | 507 | 480 | 27 | 27 | 606 | -16.3 | 613 | -17.3 | |||||||||||||||||
| Midwest | 501 | 477 | 24 | 24 | 731 | -31.5 | 666 | -24.8 | |||||||||||||||||
| Mountain | 144 | 143 | 1 | 1 | 194 | -25.8 | 171 | -15.8 | |||||||||||||||||
| Pacific | 259 | 260 | -1 | -1 | 292 | -11.3 | 309 | -16.2 | |||||||||||||||||
| South Central | 838 | 843 | -5 | -5 | 1,136 | -26.2 | 1,025 | -18.2 | |||||||||||||||||
| Salt | 230 | 238 | -8 | -8 | 320 | -28.1 | 291 | -21.0 | |||||||||||||||||
| Nonsalt | 608 | 605 | 3 | 3 | 816 | -25.5 | 734 | -17.2 | |||||||||||||||||
| Total | 2,249 | 2,203 | 46 | 46 | 2,959 | -24.0 | 2,784 | -19.2 | |||||||||||||||||
Storage is LOW for this time of year!!
Storage is at the bottom of the 5 year average:
One good way to help estimate the next EIA number is to look at the previous one and see what the temperatures were like during the 7 day period used for that report.....................then, see what the temperatures were like for the next 7 day period which will be used this next report, tomorrow:
These temperatures below cover the period for this last EIA report.
This was the 7 day period that was covered for the last EIA report:
These were the temperatures for the 7 day period which passed for this coming Thursday's EIA ng storage report:
Seasonals based on historical prices..........this graph is pretty old.
For ngq, 2.704 was the low for last week on Thurday morning (before the release of the very bullish EIA #).......cool temps in the forecast have been putting pressure on prices.
However, a close higher on Thursday, was an upside reversal technical signal on the daily charts. .................after new lows for the move earlier in the day.
As mentioned then,
"The future price depends a great deal on the latest outlook for temperatures"
Since temperature forecasts are COOLER here on Sunday, the gap lower this evening, completely obliterates last Thursdays reversal higher.
Now the question is whether this very bearish gap lower, will act as a breakaway downside gap?
If the forecasts heat up at any point this week, the gap will be filled....which is where I'm leaning.......at the moment. Filling that gap, then becomes a gap and crap(failed gap) which is usually a bullish signal.
| Natural gas 3 months |
Naturalgas 1 year below
Naturalgas 5 years below
| Naturalgas10years below
|
From Natural Gas Intelligence Monday Morning:
August Natural Gas Called Lower as Guidance Seen Mixed
8:51 AM
August natural gas futures were set to open Monday about 3.5 cents lower at around $2.722/MMBtu, with mixed forecast changes over the weekend as production continues to pressure prices
From Natural Gas Intelligence:
SoCal Citygate Reaches New Highs as Mercury Rises; Natural Gas Futures Retreat
6:05 PM
"A heat wave Monday led to the most expensive natural gas spot trades recorded at SoCal Citygate going back to at least 2008, as a volatile mixture of elevated gas-fired electric demand and ongoing supply constraints blew the roof off of prices. Largely driven by gains in California and the Desert Southwest, the NGI National Spot Gas Average surged 51 cents to $3.22/MMBtu."
Obviously, this did not effect the price of the futures as we held the gap lower from yesterday evening's open. Pretty bearish chart formation.
This has obliterated last Thursday's upside reversal after the bullish EIA storage report. Despite the weakness today, natural gas did not take out last weeks lows.
I will start following Sept ng now, since it has the most volume. It traded down to 2.688 on Monday. Last weeks lows were 2.671. That looks like an area of very strong support.
If the pattern turns much warmer in August, which is where I'm leaning, unless we get hit with some massively bearish EIA storage reports, it seems hard to imagine us taking out that support. If the pattern stays cool AND we have bearish EIA reports we can do it.