Natural Gas Tuesday
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Started by metmike - Oct. 30, 2018, 11:57 a.m.

For the weather that affects residential heating demand and natural gas prices, go here:


https://www.marketforum.com/forum/topic/16237/

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By metmike - Oct. 30, 2018, 11:58 a.m.
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From Natural Gas Intelligence earlier:

      

November Weather Seen Mixed as Natural Gas Futures Called Higher

     8:50 AM    

December natural gas futures were trading 4.2 cents higher at $3.240/MMBtu shortly before 9 a.m. ET Tuesday, with forecasters pointing to colder trends overnight for the second week of November sandwiched between milder spells. 

By metmike - Oct. 30, 2018, 11:59 a.m.
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For the previous discussions on natural gas, including 3 recent articles that have extensive fundamental information which will be key to pricing this upcoming Winter, go here:

https://www.marketforum.com/forum/topic/15990/

By metmike - Oct. 30, 2018, 11:59 a.m.
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Storage is Very Low for this time of year!!


Storage is below the  bottom of the previous 5 year range and still around 600 bcf below last year at this time!

This is why the temperature forecast matters....in  the Summer/cooling season and now in the early part of the key Winter/heating season............which is looking milder early on Monday.


Working Gas in Underground Storage Compared with Five-Year Range

By metmike - Oct. 30, 2018, noon
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EIA injection on Thursday was +58 bcf but with 5 bcf reclassified, it was actually 63 bcf. This was extremely bearish!                                                                                                                                                                                                  

Working gas in underground storage, Lower 48 states Summary textCSVJSN
  Historical Comparisons
Stocks
billion cubic feet (Bcf)
 Year ago
(10/19/17)
5-year average
(2013-17) 
Region10/19/1810/12/18net changeimplied flow  Bcf% change Bcf% change
East825  812  13  13   913  -9.6  903  -8.6  
Midwest934  908  26  26   1,078  -13.4  1,058  -11.7  
Mountain177  177  0  0   224  -21.0  215  -17.7  
Pacific262  264  -2  -2   315  -16.8  346  -24.3  
South Central896  C877  19  24  C 1,171  -23.5  1,196  -25.1  
   Salt218  203  15  15   311  -29.9  324  -32.7  
   Nonsalt678  C673  5  10  C 859  -21.1  872  -22.2  
Total3,095  C3,037  58  63  C 3,701  -16.4  3,719  -16.8  

C=Reclassification

                                    

By metmike - Oct. 30, 2018, noon
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Here's the temperature map for this last EIA reporting period.


Huge cold anomalies and residential heating demand.............which should have reduced the injection by more.........except that massive supply is hitting the market finally.

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


http://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20181019.7day.mean.F.gif

By metmike - Oct. 30, 2018, noon
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Here's the temperature map for the next EIA report.


Released on Thursday at 9:30am. A huge -6 deg. C anomaly in a very high population area has me guessing that the next injection will be smaller than the last one. 

Maybe +48 bcf?? This is still bearish for the amount of cold.

Any other guesses?


http://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20181026.7day.mean.F.gif

By metmike - Oct. 30, 2018, 1:17 p.m.
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Very mild 12z operational GFS putting pressure on natural gas....though most of the price drop occurred before it came out.

The very cold 0z GFS last night(outlier) is mainly what caused the huge spike higher early this morning.


The  European model monthly(768 hours) had a major cold outbreak in the Midwest/East in week 3 late yesterday and that might have been a factor in the spike higher (though I would never trade off of that product).


The MJO looks like it would be favorable for warm weather in November. Is that what you have Larry?


When natural gas trades/moves like it did last night and very early this morning, it's almost impossible to trade. 

By metmike - Oct. 30, 2018, 5:04 p.m.
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12Z operational European model, day 10......much colder than the other models.

                   

Loading Maps...

By WxFollower - Oct. 30, 2018, 6:03 p.m.
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Mike said: "Very mild 12z operational GFS putting pressure on natural gas....though most of the price drop occurred before it came out.

The very cold 0z GFS last night(outlier) is mainly what caused the huge spike higher early this morning.


The  European model monthly(768 hours) had a major cold outbreak in the Midwest/East in week 3 late yesterday and that might have been a factor in the spike higher (though I would never trade off of that product).


The MJO looks like it would be favorable for warm weather in November. Is that what you have Larry?"

-----------------------------------------------

Mike,

 I think that NG rise this morning after 6:30 AM CDT was largely related to colder late week 2 forecasts despite slight warming early week 2 and during week 1. Then, like you mentioned, it fell back late morning before the 12Z GFS was released. I have no answer on the MJO.

By metmike - Oct. 30, 2018, 7:03 p.m.
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11-8 to 11-12 on the 0z GFS last night was the only major cold intrusion for that model that greatly exceeded average HDD's.

By metmike - Oct. 30, 2018, 7:10 p.m.
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From Natural Gas Intelligence:

Chilling Cold Creeps Back into Weather Outlooks, December NatGas Slides a Penny

     5:56 PM    

"Shoulder-season volatility -- in both weather models and natural gas pricing -- continued on Tuesday as traders appeared unsure of what to make of the latest weather data, which reflected a return to cold weather in the long range but warmer weather through the medium term. The Nymex December gas futures contract, in its first day in the prompt-month position, settled at $3.187, down 1.1 cents on the day. January slipped 1.7 cents to $3.244. "


I'm not sure if they are referring to the European monthly that showed a widespread cold outbreak in week 3 on its update late yesterday. That 768 hour model is updated twice a week.......on Monday and Thursdays.

It doesn't display a great deal of skill for sure but the spike up early this morning was pretty powerful.........and didn't last long but must have been the result of either that, or the much colder 0z GFS mentioned previously or the updated CFS weeks 3-4 that I will be getting later tonight hopefully. 

By WxFollower - Oct. 30, 2018, 7:12 p.m.
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Mike,

 Thanks for clarifying. With the various models and runs, it can get confusing about what appears to be causing each price move.

 Edit: my provider had a change of -4 HDD week 1 through early week 2 but that was negated by a +5 HDD mid to late week 2 fwiw.

By metmike - Oct. 30, 2018, 8:01 p.m.
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Am getting the CFS, latest updates 4 times a day as of a few minutes ago from Radiant.  I like their products. 


I'm not suggesting this had anything to do with the big spike higher last night because I haven't followed this product based on current updates but note that the 0z run of the CFS week 3 had below normal temps over the eastern 1/3rd of the country vs previous warm forecasts for week 3.


Not surprisingly, 2 runs later on the 12z CFS run for week 3, the same area had much above average temps........so there is not much skill and this is well known.  I would never use the CFS to trade on unless it suddenly shows something powerful on many consecutive runs that also lines up with the more important weather changes in the 2 week forecast.