Thanks much, Larry!

Back home for the rest of the month and trying to catch up but am thinking this may have been an extreme, overdone short covering spike higher because, like you stated, there's nothing milder today to justify a big move lower and what is turning out to be a huge REVERSAL DOWN. 

More later.

Looking forward to your analysis, Mike!

NG opened up a whopping 7% this evening! With the ensembles still looking cold dominated, with no end yet in sight, and with NG having closed close to 7% off its highs on Fri, that actually isn’t a shock. So, now it is back up to near its Thu evening highs in the 3.50s.

I tried to buy natural gas just before the close on Friday with numerous attempts and market orders that didn't go thru for some odd reason. 

I'm thinking that the margins have gone way up and my trading program wouldn't allow me to put on a position to hold over a weekend because of the increased margin requirements for the same number of contracts I can day trade. What a bummer on the open this evening, not being long.  

Natural gas in storage is ABOVE the 5 year average. If it turns mild again, the price will crash hard!

https://ir.eia.gov/ngs/ngs.html

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending November 15, 2024   |  Released: November 21, 2024 at 10:30 a.m.   |  Next Release: November 27, 2024 

Summary

Working gas in storage was 3,969 Bcf as of Friday, November 15, 2024, according to EIA estimates. This represents  a net decrease of 3 Bcf from the previous week. Stocks were 141 Bcf higher than last year at this time and 239 Bcf above the five-year average of 3,730 Bcf. At 3,969 Bcf, total working gas is  above the five-year historical range.

 For information on sampling error in this report, see Estimated Measures of Sampling Variability table below. 

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

Temps for this Thursday's EIA: EXTREMELY MILD in the high population centers. So LESS demand for burning natural gas for heating homes.

https://www.cpc.ncep.noaa.gov/products/tanal/temp_analyses.php

This was the last 0z European Ensemble model. HDDs are on the left in purple. It was -6 HDDs vs the previous run 12 hours earlier.

Huge spike higher from cold later this week. LESS cold later in week 2 as it warms up in the West and Central US and stays cold in the East.

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

500 mb map for the EE at the end of 2 weeks. Strong ridge/west-trough east (cold) couplet.

I figured out why my buy order wouldn't get accepted minutes before the close on Friday.

The margin requirement was tripled for the expiring front month, in addition to margins being 10+ times higher for a position trade(held overnight vs a day trade).

Not trading and following the markets as much recently because of Dad, I completely forgot that NGZ is close to expiring and was throwing this order in with minutes left to trade for the week. 

I could say that it was a good lesson but the circumstances are not going to happen again the rest of my life.  Figuring it out, at least verified exactly what my trading limits are which might help in the near future even though my trading has been near zilch recently. 

-7 HDDs on this last 12z EE (left-purple) compared to the previous one 12 hours earlier.

Green is the rapidly increasing seasonal HDDs based on Winter cold approaching.

All the latest comprehensive weather here:

https://www.marketforum.com/forum/topic/83844/

NG down 4.5-5% for the last few hours with most of drop from late last evening through early this morning.

 Mike, if you’re following, were there any warmer ensemble runs last night?

MUCH warmer overnight, Larry!

The EIA number is coming up a day early because of Thanksgiving and it will be unusually bearish but the market dialed that in before the weather happened.

-10 HDDs on the last 0z EE vs the previous 12z run!

Very bearish for late November. Not sure what was expected.

The blue line on the storage level graph below, continues ABOVE the 5 year range(higher than any of the last 5 years) and near record high levels.

https://ir.eia.gov/ngs/ngs.html

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending November 22, 2024   |  Released: November 27, 2024 at 12:00 p.m.   |  Next Release: December 5, 2024 

Summary

Working gas in storage was 3,967 Bcf as of Friday, November 22, 2024, according to EIA estimates. This represents  a net decrease of 2 Bcf from the previous week. Stocks were 134 Bcf higher than last year at this time and 267 Bcf above the five-year average of 3,700 Bcf. At 3,967 Bcf, total working gas is  above 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 2019 through 2023. The dashed vertical lines indicate current and year-ago weekly periods.

Thanks, Mike.

NG ended up down 8%!

Appreciate that, Larry. Happy Thanksgiving!

The last 12z GEFS was a whopping +14 HDDs. Its the purple line on the left. This model comes out every 6 hours vs the EE that comes out every 12 hours.

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

The 12z EE was +8 HDDs vs the previous 0z EE:

Still a cross polar flow and ridge-west/trough east couplet to transport that cold from Canada to the central and especially eastern US. 

Natural gas is up rather notably this morning (+4%) indicating that the two week forecast is most likely at least hanging on to continued cold, if not colder than how it looked before Thanksgiving. 

Natural gas is down 6% this evening, which is usually at this time of year indicative of reduced cold in the two week forecast, especially toward the end of week two.

Thanks, Larry!

Correctamungo!

The last 0z EE model was another -4HDDs vs the previous 12z run. After this current cold spike peaks in a few days, temps dive to ABOVE average(below the green line).

We have a near record amount of ng in storage right now.

Even with the strong bearish slant to the weather forecast right now, the bullish case is not completely dead!

This is the just out 12z Canadian ensemble which has several bullish members, which still have the cross polar flow dumping air from Siberia into Canada which provides a source region for cold fronts entering the US.

On the other hand, there is Southeast ridge building on some models that will provide resistance to cold penetration and warmth in the East. 

This is the battle between the northern stream and southern stream.

https://weather.gc.ca/ensemble/charts_e.html?Hour=384&Day=0&RunTime=12&Type=gz

Another -5 HDDs on the last overnight 0z European Ensemble model.

Crystal clear top in natural gas last month when the impact of approaching cold was all dialed in. 

Now, the market is trading milder forecasts.

https://tradingeconomics.com/commodity/natural-gas

Thanks, Mike!

NG is down 15% vs one week ago!

The EIA storage report should feature a seasonable  withdrawal compared to the end of November historical average.

https://www.cpc.ncep.noaa.gov/products/tanal/temp_analyses.php

++++++++

-30 Bcf.  The current amount of ng in storage is still very robust and ABOVE the 5 year range, indicated by the blue line on the graph below.

https://ir.eia.gov/ngs/ngs.html

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending November 29, 2024   |  Released: December 5, 2024 at 10:30 a.m.   |  Next Release: December 12, 2024                                                                                                                                 

Summary

Working gas in storage was 3,937 Bcf as of Friday, November 29, 2024, according to EIA estimates. This represents  a net decrease of 30 Bcf from the previous week. Stocks were 185 Bcf higher than last year at this time and 284 Bcf above the five-year average of 3,653 Bcf. At 3,937 Bcf, total working gas is  above 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 2019 through 2023. The dashed vertical lines indicate current and year-ago weekly periods.

The EE was another -5 HDDs overnight.  $3 is extremely solid support right now.

A minority but significant minority of the ensembles are trying to morph back to a cold pattern at the end of 2 weeks. There is a battle between the northern stream, the milder Pacific stream and an upper level ridge building in the Southeast that will cause resistance to cold.

https://weather.gc.ca/ensemble/charts_e.html?Hour=384&Day=0&RunTime=00&Type=gz

Most of the guidance is bearish and mild for natural gas. However, this last EE model solution at 2 weeks still shows a tenacious ridge/west-trough/east couplet which is potentially bullish. However, the northern stream is lacking and the source region of the air in the East is more Southern Canada vs Arctic.

It would favor chilly weather in the Southeast more than any other place because the contrast between Southern Canadian sourced air and average is greatest there.

The West will be MUCH above average with this pattern. That mild air will spill eastward into the Plains, then Midwest. The farther east we go, the cooler vs average it gets. 

Hey Mike,

 I don’t have the HDDs. But looking at the GEFS and EE, it sure seems like they’ve overall cooled off since Thur in the E US with upper troughing for both 12/11-14 and for 12/20+.

 Are you seeing this, too?

I’m still not trading commodities currently. But if I were I’d be tempted to look for an opportunity to go long NG considering how far down it was late last week vs when it peaked near 3.56 in Nov.

*Corrected date typo….12/20+ instead of 12/2.

Thanks, Larry!

You are correct! Great call! You should start trading again!

Huge, bullish upside breakaway gap higher on the open tonight.

The ridge/west-trough east couplet mentioned yesterday has amplified a bit but the biggest deal is more cross polar flow into Canada from Siberia on the last run which introduces a MUCH colder source region for the cold when cold fronts come south from Canada.

The NWS week 2 products were still VERY bearish/mild but the market knows better. 

When was the last time you saw a huge gap higher in December with a forecast like this?

Regardless, there is a great deal of uncertainty and model runs are likely to change a great deal compared to their  previous runs. 

More shortly.

7pm: The last 18z GEFS just out(purple below/left) was LESS cold. -7 HDDs vs the last 12z run(yellow/tan) but much less cross polar flow and cold coming into Canada and south into the Eastern US. As a result, NG dropped to just below the open and made new lows but there is still a massive price gap above Friday's highs. EXTREMELY VOLATILE!

+++++++++++

Heating oil isn't the best weather market but the East is where the coldest air will be(where they use the most heating oil for residential heating in the Winter). This is ONLY for the East below. Above is the entire country.

Hey Mike, thanks for the update! I’m seeing even milder 0Z GEFS and 0Z Euro operational and NG giving up more gains. Are you seeing the same?

 0Z EE still early in its run though.

Yessireee, Larry!
the 12z run GEFS had the 850mb -3 deg. C isotherm over Chicago At the end of 2 weeks.
the last 0z, 12 hours later is at 0 deg. C.

thats +5 deg F for that time frame in a large area 0z. Warmer than 12z.

EE was close to the previous run.

NG sold off a great deal since the huge gap higher on the Sunday night open but has been unable to completely fill the gap……so far!

It will,probably take weather models turning colder again to keep the price from filling the gap.

$3 last week was clearly rock solid support. NG in storage is above the 5 year range.

However, the next 2 EIA  storage reports on Thursday at 9;30am will show robust drawdowns that take is into,the top of that range.

The 12z European Ensemble(purple/left) was -6 HDDs BEARISH vs the previous 0z run from 12 hours earlier.  However, as mentioned the ridge/west-trough/east couplet is NOT extremely bearish because its a teleconnection that favors cold in the high population centers of the East/Southeast that use alot of natural gas for residential heating!

Below are the mid/upper level features in 2 weeks. Negative anomalies in blue. The upper level steering currents tend to follow the streamlines(height contours) below.  So there is a northerly component in the east but the source region is still not very cold, meaning the type of cold will be more Southern Canada and NOT Arctic. This means the Southeast, with the greatest contrast vs average with that type of cold will see the chilliest weather COMPARED TO AVERAGE IN THE SOUTHEAST. Even there, it will be close to average cold.

What would turn this BULLISH is if Canada fills up with Arctic air(instead of mild Pacific air from zonal/west to east flow. 

The NWS agrees with the previous assessment with their just out week 2 forecasts:

https://www.cpc.ncep.noaa.gov/products/predictions/814day/index.php