Good morning everyone. We just breached the 3000 tcf mark. Clearly we are going to have a low injection, if not a withdrawal next week and possible even the week after.
Unless we warm up some in November, have we peaked? I don't think I would get much argument, that we are really close to the top in terms of NG injection.
Thanks Jim.
The weather coming up for the next 2 weeks, has looked colder in this weeks outlooks but last night, looked less cold.
If the cold increases again, we can make new highs. However, if we start turning much milder, this is the time of year for a top..........especially with the low storage because the low storage and cold is what spiked us up here.
I'm not picking a side at the moment.
From Natural Gas Intelligence earlier this morning:
Cold Seen Easing as November Natural Gas Called Lower
8:53 AM
November natural gas futures were down 6.0 cents to $3.260/MMBtu shortly before 9 a.m. ET Thursday, with forecasts easing off cold from the prior day’s guidance as the market turns its attention to potentially bearish government storage data.
For the weather that affects natural gas prices(residential heating demand) go here:
Storage is Very Low for this time of year!!
Storage is below the bottom of the previous 5 year range and around 600 bcf below last year at this time!
This is why the temperature forecast matters....in the Summer/cooling season and Winter/heating season. We have a spike up of early season residential heating demand this week into next week. That caused a spike up in ng prices earlier this week.
EIA injection, as Jim stated was +81 bcf.
Not sure what the market expected but that seems bearish considering temperatures last week. After Patrick pointed out that the warmth in the East was actually more bearish than bullish, I take that back..........even though I thought the number might be a tad lower.
From Natural Gas Intelligence: EIA Reports Slightly Supportive 81 Bcf Storage Injection; November Natural Gas Bounces
| Working gas in underground storage, Lower 48 states Summary text CSV JSN | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historical Comparisons | |||||||||||||||||||||||||
| Stocks billion cubic feet (Bcf) | Year ago (10/12/17) | 5-year average (2013-17) | |||||||||||||||||||||||
| Region | 10/12/18 | 10/05/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
| East | 812 | 790 | 22 | 22 | 899 | -9.7 | 887 | -8.5 | |||||||||||||||||
| Midwest | 908 | 871 | 37 | 37 | 1,050 | -13.5 | 1,032 | -12.0 | |||||||||||||||||
| Mountain | 177 | 180 | -3 | -3 | 224 | -21.0 | 213 | -16.9 | |||||||||||||||||
| Pacific | 264 | 262 | 2 | 2 | 316 | -16.5 | 344 | -23.3 | |||||||||||||||||
| South Central | 877 | 854 | 23 | 23 | 1,150 | -23.7 | 1,166 | -24.8 | |||||||||||||||||
| Salt | 203 | 191 | 12 | 12 | 303 | -33.0 | 310 | -34.5 | |||||||||||||||||
| Nonsalt | 673 | 663 | 10 | 10 | 847 | -20.5 | 856 | -21.4 | |||||||||||||||||
| Total | 3,037 | 2,956 | 81 | 81 | 3,638 | -16.5 | 3,642 | -16.6 | |||||||||||||||||
These were the temperatures that were used for the EIA report. Take a good look at that map. You don't see anomaly maps with such extremes in magnitude too often.
Natural Gas price charts
We finally broke out above $3!
A lot of volatility with the low storage. Prices have been gyrating up and down with the latest weather forecast............Monday was up as cold was added to the extended forecast.........lasting into early November.
Wednesday's forecast added more cold.....another spike higher resulted. Thursdays forecast has taken some cold away. Seasonals turn strongly negative here.
| Natural gas 3 months |
Naturalgas 1 year below
Naturalgas 5 years below
| Naturalgas10years below
|
Agreed Mike. We do normally see a seasonal top this time of year. It will be interesting to see what a withdrawal or 2 and very low storage do to that seasonal trend.
The anomaly map is cute but doesn't look too bad. A lot of heat where cooling is over & cold where not many people live.
The yellow boot of averageness stomping on San Francisco is a little disturbing.
Jim,
I think that recent price strength dialed in the cold.
The market trades on new information, which at this point, is the weather to end October and start off Novembef.
Funny observation on the boot Patrick!
You are right about some of those very warm anomalies being in places that are often having heating demand............that, in this case spelled bearish warmth.
Here's the beginning period for the next EIA report. This is last Thu thru Tue and everything shifted much farther east/southeast after that:
Closing comments from Natural Gas Intelligence:
November Natural Gas Plunges 12 Cents as Cold Seen Breaking Down; Spot Gas Crashes
5:50 PM
A pullback in heating degree days for the end of October/early November laid the groundwork for a dramatic sell-off in natural gas futures Thursday that was further pressured by Lower 48 gas production returning to near record highs in recent days. With no surprises on the storage data front, the Nymex November gas contract went on to settle at $3.198, down 12.2 cents.
I think that the huge losses today in natural gas, on flimsy model support for temperatures warming up(actually more like them just not being as cold overnight-then the very mild outlying late morning operational model- that spiked us below 3.20) are a sign of what will happen if temperatures in the extended turn decidedly mild(widespread above average).
Despite storage being low, mild temps in November would lead to some injections that put alot of pressure on prices.
The updated November and Winter outlooks being so mild added ammo to the bearish cause today. See here: https://www.marketforum.com/forum/topic/15443/