Looks like traders are waking up to a new reality in NG. Even with robust supply, demand is even greater.
You've been bullish ng for months Jim and we finally broke above $3 today!
We have both heat in the Southeast building back in causing late season CDD's and some cold dropping down in the north causing early season HDD's. This has been the case for a week now.
From Natural Gas Intelligence:
10:36 AM
Forecasts Seen Warmer Over Weekend as October Natural Gas Called Higher
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...........and now, to generate residential heating:
Storage is Very Low for this time of year!!
Storage is just below the bottom of the previous 5 year range and also almost 700 bcf below last year at this time!
This is why the temperature forecast matters....in the Summer/cooling season and Winter/heating season.
+86 billion cubic feet
From NGI: Natural Gas Futures Not Rattled as EIA’s Storage Number Surpasses Consensus
Working gas in underground storage, Lower 48 states Summary textCSVJSN | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Historical Comparisons | |||||||||||||||||||||||||
Stocks billion cubic feet (Bcf) | Year ago (09/14/17) | 5-year average (2013-17) | |||||||||||||||||||||||
Region | 09/14/18 | 09/07/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
East | 709 | 679 | 30 | 30 | 830 | -14.6 | 801 | -11.5 | |||||||||||||||||
Midwest | 770 | 734 | 36 | 36 | 933 | -17.5 | 910 | -15.4 | |||||||||||||||||
Mountain | 170 | 166 | 4 | 4 | 211 | -19.4 | 199 | -14.6 | |||||||||||||||||
Pacific | 255 | 250 | 5 | 5 | 299 | -14.7 | 328 | -22.3 | |||||||||||||||||
South Central | 818 | 806 | 12 | 12 | 1,120 | -27.0 | 1,071 | -23.6 | |||||||||||||||||
Salt | 184 | 182 | 2 | 2 | 301 | -38.9 | 274 | -32.8 | |||||||||||||||||
Nonsalt | 635 | 624 | 11 | 11 | 819 | -22.5 | 797 | -20.3 | |||||||||||||||||
Total | 2,722 | 2,636 | 86 | 86 | 3,394 | -19.8 | 3,308 | -17.7 |
These were the temperatures for the 7 day period that was used for that report:
These are the temperatures from last week that occurred during the period used for this upcoming EIA report on Thursday.
WOW! Look at that heat! Temperatures over 10 degrees above average in the epicenter of the heat anomalies! The injection is clearly going to be a lower one than the previous one and the 5 year average because of so many CDD's.
Natural gas hit some tough resistance back in August. Even the hottest of the hot forecasts couldn't push us to $3 with very low storage.........but we held support 2 weeks ago and rallied strong last week.
The heating season is coming up and we have some chill in the forecast that caused ng to spike higher on Tuesday, then again on Thursday of last week. Now we have added heat here on Monday.
We finally broke out above $3 today. Will there be follow thru or was this spike higher a fake out?
Natural gas 3 months |
Naturalgas 1 year below
Naturalgas 5 years below
Naturalgas10years below |
By Jim_M - Sept. 17, 2018, 3:22 p.m.
Bearish? Where storage is right now, anything under 100 bcf is bullish. Throw a cold month in this winter and things could get very serious.
+++++++++++++++++++++++++++++++
By Jim_M - Sept. 20, 2018, 10:50 a.m.
Roughly 96BCF /wk needed over the next 6 weeks to hit the EIA estimate.
+++++++++++++++++++++++++++++++++++++++++++++++
By metmike - Sept. 20, 2018, 6:17 p.m.
Thanks Jim,
The market is really getting revved up over this early heating season cold because of the low storage.
I wouldn't say months, but definitely weeks. Any reason not to be bullish? I'm wondering if we will even make 3000bcf? I'm reading that China is still going to import NG from us despite sanctions. EIA picked 3300+bcf for storage based on what they thought the monthly injections would be and they aren't even going to be close. Traders were trading that number. Unless a miracle happens, that number is toast.
Give me something bearish to change my mind.
Thanks Jim!
The market agrees with you.
The front month, October Natural gas will be expiring on Wednesday.
Closing comments from Natural Gas Intelligence:
Natural Gas Bulls Continue Charge as Storage Deficit Seen Widening
5:33 PM
Natural gas futures bulls told the bears to go back into hibernation Monday, with a fast-approaching winter bringing extremely lean stockpiles to the forefront as the October and November contracts decisively broke through the psychologically significant $3 barrier. Lingering heat helped spot prices strengthen throughout much of the South and in the West; the NGI National Spot Gas Average added 7 cents to $2.65/MMBtu.