For weather that affects 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:
From Natural Gas Intelligence:
November Natural Gas Called Lower as Guidance Seen Milder Overnight
8:55 AM
November natural gas futures were down about 5.2 cents to roughly $3.004/MMBtu shortly after 8:30 a.m. ET Friday as overnight forecasts failed to offer much support following Thursday’s storage-driven rally.
Storage is Very Low for this time of year!!
Storage is 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. We had record late season cooling demand last week............by a wide margin! Which caused a dinky injection vs average on Thursday. Next weeks injection will be much larger.
EIA Natural Gas storage report from Thursday.
+46 bcf
From Natural Gas Intelligence: EIA NatGas Storage Build Even Leaner Than Expected as Futures Reverse Losses
| Working gas in underground storage, Lower 48 states Summary textCSVJSN | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historical Comparisons | |||||||||||||||||||||||||
| Stocks billion cubic feet (Bcf) | Year ago (09/21/17) | 5-year average (2013-17) | |||||||||||||||||||||||
| Region | 09/21/18 | 09/14/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
| East | 729 | 709 | 20 | 20 | 846 | -13.8 | 825 | -11.6 | |||||||||||||||||
| Midwest | 800 | 770 | 30 | 30 | 960 | -16.7 | 942 | -15.1 | |||||||||||||||||
| Mountain | 173 | 170 | 3 | 3 | 216 | -19.9 | 202 | -14.4 | |||||||||||||||||
| Pacific | 259 | 255 | 4 | 4 | 306 | -15.4 | 331 | -21.8 | |||||||||||||||||
| South Central | 807 | 818 | -11 | -11 | 1,129 | -28.5 | 1,090 | -26.0 | |||||||||||||||||
| Salt | 173 | 184 | -11 | -11 | 305 | -43.3 | 281 | -38.4 | |||||||||||||||||
| Nonsalt | 634 | 635 | -1 | -1 | 824 | -23.1 | 809 | -21.6 | |||||||||||||||||
| Total | 2,768 | 2,722 | 46 | 46 | 3,458 | -20.0 | 3,389 | -18.3 | |||||||||||||||||
These are the temperatures from last week that occurred during the period used for today's EIA report.
From earlier this week:
"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 and on a couple of days this week.
We finally broke out above $3 on Monday. Then spiked back below it on Wednesday as the Oct contract expired, then spiked above it on Thursday with the bullish EIA report.......now below it again early on Friday as the extreme temperatures that caused the very low injection are not there. Volatility is typical when storage is low.
Time is running out to fill storage before the heating season and the bears are no longer pressing the short side/selling with the same confidence they had in the Summer.
| Natural gas 3 months |
Naturalgas 1 year below
Naturalgas 5 years below
| Naturalgas10years below
|
Natural Gas comments from yesterday:
U.S. Rig Count Steady as Natural Gas Drilling Activity on the Rise
4:16 PM
The U.S. natural gas rig count climbed three units to 189 for the week ended Friday (Sept. 28) as a decline in oil drilling kept the overall domestic count steady, according to data from Baker Hughes, a GE Company.
The data below had not been updated for 9-28-2018 as of this post:
From Natural Gas Intelligence:
Mild Forecast Pressures Natural Gas Futures Lower; Appalachian Spot Weakness Continues
6:15 PM
A milder outlook for October helped pressure natural gas futures lower Friday, as the conditions that contributed to a bullish weekly inventory build weren’t expected to last. Spot prices rebounded for Monday delivery in the Northeast as Appalachian basis differentials remained weak; the NGI National Spot Gas Average added 1.0 cents to $2.520/MMBtu
October weather isn't looking milder today. Regardless.....20% below 5 yr average isn't a 1 week injection problem, it's a supply demand problem and there isn't enough supply.